Middle East: Islamic Revolutionary Guard Corps
 - Question

Lord Polak: To ask Her Majesty’s Government what assessment they have made of the destabilising activities in the Middle East of the Islamic Revolutionary Guard Corps.

Lord Polak: I beg leave to ask the Question standing in my name on the Order Paper and refer the House to my registered interest as the honorary president of Conservative Friends of Israel.

Lord Sharpe of Epsom: My Lords, the Government regularly assess the impact of the IRGC’s destabilising activity throughout the region, including its political, financial and military support to several militant and proscribed groups, including Hezbollah in Lebanon and Syria, militias in Iraq and the Houthis in Yemen. Such activity compromises the region’s security and ability to prosper and it escalates high tensions. It is for this reason that we have over 200 UK sanctions listings in place against Iran, including the IRGC in its entirety, and support the enforcement of UN prohibitions on the proliferation of weapons to non-state actors.

Lord Mackenzie of Framwellgate: My Lords—

Lord Polak: I thank my noble friend for the Answer, but has he had time to read Roger Boyes’ article in today’s Times? We have failed to hold the IRGC to account for its regional destabilisation activities, such as the downing of Ukraine International Airlines flight 752 in January 2020 or the killing of British citizen Adrian Underwood on “MV Mercer Street” in July 2021. Roger Boyes concluded that
“Iran is led by a toxic alliance of aggrieved religious leaders and a corrupt revolutionary guard with a brief to sow discord”.
Her Majesty’s Government rightly proscribed Hezbollah. Hezbollah was a creation of the IRGC, so can I ask my noble friend to press his colleagues at the Home Office to fully proscribe the Islamic Revolutionary Guard Corps?

Lord Sharpe of Epsom: I thank my noble friend for his question. I have read Roger Boyes’ article and agree with his sentiments. We have been clear about our concerns about the IRGC’s continued destabilising activity throughout the region. It is for this reason that the IRGC is sanctioned in its entirety  by the UK, as I mentioned. The list of proscribed organisations is kept under constant review, but we do not routinely comment on whether an organisation is or is not under consideration for proscription.

Lord Mackenzie of Framwellgate: My Lords, I apologise for my early intervention. The revolutionary guards appear to have more power than the Iranian Government. Does the noble Lord agree that the continued unlawful detention of Nazanin Zaghari-Ratcliffe is largely due to their malevolent influence? Did the British Government support the pre-emptive assassination of military commander Qasem Soleimani by the American Government in 2020?

Lord Sharpe of Epsom: I thank the noble Lord for his question. I do not know whether the continued detention of Nazanin is related to the IRGC and I am afraid that I cannot comment on the British Government’s opinions on that particular incident.

Lord Purvis of Tweed: My Lords, when we debated the proscription of Hamas, the noble Baroness, Lady Williams, agreed to meet me and the noble Lord, Lord Anderson of Ipswich. Her office has not been in touch, so could the Minister chase that for us, please? Hamas is one of the organisations with a link to that malignant group, the IRGC. Since America proscribed the corps in April 2019, the UK presumably has been in constant contact. The Government gave a lot of detail on the proscription of Hamas, so I am not sure why the Government are not prepared to say what differences we have from the United States, given the fact that the US has proscribed it.

Lord Sharpe of Epsom: My Lords, I will certainly take that back and ask the department to get in touch with the noble Lord. I am obviously not qualified to comment on the opinions or actions of the United States. I can only reiterate what I said about the proscription of the IRGC.

Lord Singh of Wimbledon: My Lords, does the Minister agree that religious fanaticism, on which groups such as the revolutionary guard, ISIS, and some here in the UK thrive, is best countered by a far more robust questioning of dated negative culture, which attaches itself virus-like to religion? If religion is used in this way, it should be countered by vigorous debate. It is certainly not a private matter. Does the Minister agree that that discussion and debate should be given priority?

Lord Sharpe of Epsom: I entirely agree with the noble Lord.

Lord West of Spithead: My Lords, one month ago the Iranians exercised a practice dummy rum attacking the Dimona nuclear facility in Israel using 16 ballistic missiles and lots of drones. A number of agencies are now assessing that Iran will have a nuclear weapon capability within months. Where have we got to in trying to restart the JCPOA discussions to try to  stop what is rapidly rushing towards a situation where there will be a war in the Middle East as well as in Ukraine?

Lord Sharpe of Epsom: The noble Lord is right to raise the issue of ballistic missiles. It might be worth my pointing out that UN Security Council Resolution 2231, which was unanimously adopted in the Security Council and underpins the JCPOA, calls on Iran not to undertake activities related to ballistic missiles designed to be capable of delivering a nuclear weapon, including launches using such ballistic missile technology. Those ballistic missile restrictions remain in place until 2023. The noble Lord will be aware that negotiations under the JCPOA have restarted. They were suspended in the middle of last year while there was a change in the Iranian Government. We still believe that the JCPOA offers the best way forward.

Lord Austin of Dudley: How is it possible that the JCPOA has achieved anything, when, since signing up to it in 2015, Iran has carried out several ballistic missile tests, built new fortified missile bunkers, lied about the development of nuclear weapons to target our ally Israel and waged a shadow war against shipping in the Gulf, in addition, as we have heard, to kidnapping and killing British citizens? Do we not need a much tougher and robust approach when dealing with Iran, with a much tougher regime of sanctions, including against the new president?

Lord Sharpe of Epsom: My Lords, the JCPOA is not perfect, but it still represents the best and currently only framework for monitoring and constraining Iran’s nuclear programme. Our objective is to realise the benefits of the deal. A restored deal could pave the way for further discussions on regional and security concerns, including in support of a non-proliferation regime.

Lord Palmer of Childs Hill: My Lords, I was pleased to hear the Minister say that he had read Roger Boyes’ article in today’s Times. Iran has been training drone pilots at Kashan. This week they attacked Abu Dhabi airport. Will the Minister inform your Lordships’ House of the involvement of the revolutionary guard in the training and belligerent activities of these drones?

Lord Sharpe of Epsom: The UK strongly condemns the Houthi-based claimed attacks on the UAE. We are in contact with our Emirati partners and have offered the UK’s solidarity and support. The Foreign Secretary tweeted about this on 17 January. She said:
“I condemn in the strongest terms the Houthi claim to terrorist attacks on the UAE”.

Lord Collins of Highbury: My Lords, can I push the Minister a little more in response to my noble friend’s question on the JCPOA? We have a lot of evidence about the Iranian Government, the IRGC and the detention of dual nationals—all evidence of  their refusal to comply with international law. Can the noble Lord tell us whether there have been more detailed discussions with our allies about how we broaden the scope of the JCPOA to include the issue of ballistic missiles?

Lord Sharpe of Epsom: As I mentioned in answer to an earlier question, the negotiations in Vienna were suspended in June—the Iranians halted talks on 20 June—but they restarted in Iran on 29 November. We are in constant contact with our allies and partners on this, including the E3 and of course the US.

Lord Shinkwin: My Lords, given that, as we have already heard, British citizens have died as a result of numerous actions of terrorism by the IRGC, can my noble friend indicate what sort of British body count we are looking at before the IRGC is proscribed as a terrorist group?

Lord Sharpe of Epsom: My Lords, I cannot do that. However, I can condemn the unlawful and callous attacks to which I think the noble Lord may be referring and to which others have also referred, which were committed on a merchant vessel off the coast of Oman, killing a British and a Romanian national. Obviously, our thoughts are with the friends and family of those killed in that incident. For what it is worth, we believe that that attack was deliberate, targeted and a clear violation of international law. The UK used its presidency of the G7 to co-ordinate a very strongly worded statement against Iran, which I think was the first of its kind.

Lord Alton of Liverpool: My Lords, among those who were killed on flight 752, when 150 people were left dead, were UK nationals. Will the noble Lord return to the question asked to him by his noble friend Lord Polak and tell us what progress is being made on the claims for restitution that have been made by the families of the UK citizens and citizens from many other countries?

Lord Sharpe of Epsom: The UK is committed to securing justice for the victims on the flight to which the noble Lord refers. The UK is working closely with partners in the International Coordination and Response Group to achieve this. My right honourable friend James Cleverly is a member of and co-ordinates UK interests in that group.

Colombia: Human Rights Abuses
 - Question

Baroness Blower: To ask Her Majesty’s Government what representations they have made to the government of Colombia about investigating human rights abuses, including killings, by police during the protests in that country in September 2020 and May 2021.

Lord Sharpe of Epsom: UK Ministers and senior officials regularly raise human rights issues as well as specific cases of concern with the Colombian Government. Most recently, on a visit to Colombia last November, the former UK Minister for Europe and the Americas, Wendy Morton, spoke to Vice-President Ramírez regarding the human rights situation. We look to the Colombian authorities to investigate fully any reports of excessive use of force against protesters and to take appropriate action against those responsible.

Baroness Blower: I thank the Minister for his Answer. However, despite that engagement between the UK and Colombia, human rights abuses continue, including in November last year with the abduction and murder of a teacher trade unionist. Does the Minister agree that it would be proportionate to suspend the invitation to Colombia to join the UK-Andean trade agreement—a call made by the TUC—until police abuses and impunity are properly addressed? Will the Minister meet me, other concerned noble Lords and the TUC to discuss this matter?

Lord Sharpe of Epsom: I commend the noble Baroness for her efforts on the subject of Colombia— I know that she is very involved in it—and of course we would condemn any further abuses. Perhaps I may give a slightly longer answer on what the Colombian Government are doing—obviously, we are pushing them on this. The national police have opened 231 internal investigations against members of their own institution for alleged excessive use of force during the 2021 protests. Currently, 111 inquiries remain open and the rest are being closed. Six police officers have been sanctioned and two have been dismissed from the institution. The prosecutor’s office confirmed that it had opened 200 inquiries for the alleged excessive use of force by the national police during the 2021 protests. Ninety-four disciplinary processes are currently under way and three officers have been prosecuted. It is fair to say that the Colombian Government are taking this seriously.

Baroness Hooper: My Lords, the difficult situation in Colombia continues to develop. As migrants from across Latin America and indeed other parts of the world head north towards the United States, the almost impenetrable Darien Gap between Colombia and Panama is becoming a breeding ground for people traffickers, smugglers and other criminal networks. Given that our embassy in Bogotá is the largest in the Americas after that in Washington DC, can my noble friend encourage our embassy to take a lead in urging regional co-operation to support the Colombian Government?

Lord Sharpe of Epsom: I am very happy to reassure my noble friend on that basis. She will also be aware that the UK is the lead on the Security Council on matters regarding Colombia.

Lord Collins of Highbury: My Lords, I hear what the noble Lord said to my noble friend in respect of the actions of the police. Is he aware that members of the Colombian senate have warned that a new security law will further criminalise protests and weaken  human rights protections? What discussions have the noble Lord’s Government had with other Ministers in the Colombian Government on a new security law?

Lord Sharpe of Epsom: I cannot answer the noble Lord on that specific issue, but I can tell him that in the last three months there have been a number of high-level discussions between the UK Government and the Colombian Government. That includes a meeting in September last year between the Prime Minister and President Duque. I have already referred to the visit to Colombia by the Minister for European Neighbourhood and the Americas, Wendy Morton. As I say, there were a number of other recent interactions —I think there were about 10 between September and December. It is very much an open channel.

Baroness Northover: My Lords, Global Witness reports that Colombia is the most dangerous place in the world to be an environmental activist—65 people were killed in 2020. Given that the FCDO oversees the climate fund, will the Government review environmental funding to Colombia to ensure that protecting environmental and indigenous activists is a key priority?

Lord Sharpe of Epsom: My Lords, Colombia is one of our strongest partners on climate and the environment, with a leading regional influence and an ambitious nationally determined contribution of 51%. The UK-Colombia Partnership for Sustainable Growth, which was signed in June 2019, formalises the relationship between the two countries on clean growth and climate change. The reason I mention all that is because Colombia is a COP 26 priority country, and the UK has committed over £240 million of international climate finance in Colombia since 2011. We believe that the promotion of sustainable economic opportunities will help tackle some of the root causes of ongoing violence.

Baroness Coussins: My Lords, during the 2021 protests, the UN High Commissioner for Human Rights received over 60 reports of sexual violations allegedly perpetrated by the Colombian police, many in the context of arbitrary arrests. Given Her Majesty’s Government’s commendable lead on the prevention of conflict sexual violence and the forthcoming conference I believe we will be hosting on this topic, have the Government raised these reports with the Colombian Government and if so, what has been their response?

Lord Sharpe of Epsom: I am afraid I do not know the answer to that question, but I go back to my earlier answer. The Colombian police and Government are investigating a large number of various allegations of poor behaviour and I will certainly take back the question and ask my colleagues.

Lord Davies of Brixton: My Lords, I am sure the Minister agrees that full implementation of Colombia’s historic 2016 peace agreement remains crucial but advocates for peace continue to face violence and intimidation. In December, a group calling itself the Black Eagles issued death threats against Colombian  senators Iván Cepeda, Victoria Sandino and Maria José Pizarro and a number of civil society activists. Will the Minister condemn these threats and make representations to the Colombian Government over the safety of the named individuals?

Lord Sharpe of Epsom: We should all condemn all threats to individuals in a functioning democracy. The UK has, as I said earlier, been a leading international advocate of Colombia’s peace process which, as the noble Lord rightly points out, is five years old—indeed, Wendy Morton went to Colombia to celebrate the fifth anniversary. We commend the Colombian Government on their commitment to implement the 2016 peace accords and we have contributed more than £68 million in support through the UK’s Conflict, Security and Stability Fund. We are the second largest donor to the UN trust fund for Colombia and, of course, we continue to raise these issues.

Lord Purvis of Tweed: My Lords, political activism is one of the clearest examples of personal freedom. The BBC has reported that 145 activists were killed last year in Colombia. The Foreign Secretary says that British policies for trade and diplomacy are now combined to support personal freedom. Now that we have an independent trade agreement with Colombia, what discussions have we had with regards to the human rights and trade policy with that country to protect personal freedom?

Lord Sharpe of Epsom: I thank the noble Lord for his question. He may remember that my noble friend Lord Ahmad discussed this issue at length during a virtual visit to Colombia last year, including with the Government and members of civil society. We are taking forward their suggestions of further assistance that the UK could provide.
Regarding the trade relationship, I am sure the noble Lord is aware that we are on a bridging agreement at the moment. The Colombian Government—actually, it is the Colombian courts, not the Government—have not yet ratified the agreement. Continuity for the framework governing UK-Colombia trade is provided by this bridging arrangement but, of course, those matters are enshrined in the agreement for when it is signed.

Lord Browne of Ladyton: My Lords, the UK has a long-standing £2.1 million training programme with the Colombian police. Not only did the December UN report into the April/May 2021 strike protest conclude that there was a
“unnecessary or disproportionate use of force by police officers”;
but Amnesty International’s November report into the protests found that the Colombian security forces, particularly the mobile anti-riot squad, inflicted more than 100 eye injuries with non-lethal projectiles in a pattern of deliberate behaviour that it concluded was intended to punish victims for
“exercising their legitimate right to social protest”.
After lots of requests for this, is it not time for a formal review of our continued support for the police training programme?

Lord Sharpe of Epsom: My Lords, obviously we are aware of those reports of eye injuries. As I said earlier, all these things are being investigated. We have made representations to the Colombian Government as regards police activities but, in terms of our activities with the police, I assure noble Lords that everything that we are doing there is intended to support the development of civil society. I think it probably makes sense for us to continue to do that.

Lord Monks: My Lords, the UK played a noble and honourable role in promoting the peace agreement. I want to return to the question posed by my noble friend Lady Blower. Will the Government agree to a cross-party meeting with interested Peers and others about what can be done now to make sure that the writ of the agreement runs in parts of Colombia where it currently does not?

Lord Sharpe of Epsom: I thank the noble Lord for that reminder; I apologise for not answering the noble Baroness’s question earlier. I am happy to take that back and try to facilitate such a meeting.

Wales: Coal Tips
 - Question

Baroness Wilcox of Newport: To ask Her Majesty’s Government what recent discussions they have had with the Welsh Government about the remediation and repair of coal tips in Wales; and what plans they have, if any, to provide funding to support such remediation and repair work.

Viscount Younger of Leckie: My Lords, the UK and Welsh Governments discuss this matter regularly. The UK Government are committed to fulfilling their responsibilities, so the Coal Authority is providing technical support. We also provided the Welsh Government with £31 million in 2020-21 to help with the unforeseen impacts of Storm Dennis, including damage to coal tips. Ultimately, however, environmental matters are fully devolved, and the Welsh Government are more than adequately funded to manage all devolved responsibilities.

Baroness Wilcox of Newport: Diolch am yr ateb; thank you for the answer. There are 600 in Neath Port Talbot, 300 in Rhondda Cynon Taf, 216 in Wrexham, 205 in Caerphilly, 203 in Swansea and 922 in other local authority areas, totalling 2,446 disused coal tips in Wales. Mark Drakeford, our First Minister, has said:
“These sites pre-date devolution. Our funding settlement does not recognise the substantial, long-term costs of remediating and repairing these sites.”
Will the UK Government cease prevaricating and pay up before something serious happens again?

Viscount Younger of Leckie: In answering this question, I truly remember the Aberfan disaster; we should never forget it. Last year represented its 55th anniversary. I was aged 11 at the time of the disaster; it is indelibly on my mind.
The central pillar of the support we have given is to ensure that the Welsh Government are properly funded to manage their devolved responsibilities, including the remediation of vulnerable coal tips. At the 2021 spending review, the UK Government provided the Welsh Government with the largest annual block grant in real terms of any spending review settlement since devolution in 1998.

Lord Morris of Aberavon: My Lords, should the pre-devolution scarring of the countryside by the defunct National Coal Board be the responsibility of a devolved Government? Is the Treasury currently considering a reform of the Barnett formula based on history rather than needs, or are the devolved countries excluded from levelling up?

Viscount Younger of Leckie: To answer the noble and learned Lord’s first question, the Barnett formula remains the key part of the arrangement for pooling and sharing risks and resources across the UK. This ensures that all parts of the UK, including Wales, receive a secure and stable level of funding for public services. Indeed, there are 2,500 disused coal tips, and it is vital that the money that we give to Wales is used effectively to ensure that these pits are safe.

Lord Harlech: My Lords, as we saw with the Tylorstown landslide in February 2020, the impact of climate change, with warmer annual temperatures and greater rainfall, has increased the risk of coal-tip landslides. Can my noble friend the Minister tell the House whether the Welsh Government’s programme of work includes the inspection and maintenance of coal tips and the deployment of technology to monitor tip movement?

Viscount Younger of Leckie: Just to reiterate, this is a devolved matter, and we expect the Welsh Government to manage any long-term costs associated with ensuring the safety of Welsh coal tips, as I said before. They are more than adequately funded to do so. In October 2021, quite recently, the Secretary of State for Wales and the First Minister of Wales co-chaired the coal tip safety summit to receive an update from the joint task force. This task force has identified and categorised all tips in Wales and undertaken inspections of all those in the highest-risk groups.

Lord Thomas of Gresford: My Lords, Aberfan and the deep-mine disasters of Cynheidre and Gresford were all long before there was any devolved government in Wales. The Tylorstown slip in 2020 was a flowslide caused by Storm Dennis, and repairs have cost £18 million, to which the UK Government have contributed only £2.5 million. Do the Government recognise that climate change is making these tips more dangerous? Do they also recognise that Wales’s contribution to the wealth of the United Kingdom in the past must be matched by United Kingdom funding to deal with the dangers of the present?

Viscount Younger of Leckie: The noble Lord mentioned the Tylorstown slip in 2020. The Coal Authority worked through BEIS, the Cabinet Office, the old  MHCLG—now called the Department for Levelling Up—and, indeed, the Scotland Office to remind local authorities of their responsibilities in the management and oversight of coal tips, offering support where it can. I reiterate that there is more than enough money for the Welsh Government to ensure full safety cover.

Baroness Finlay of Llandaff: Do the Government recognise that 327 tips are classified as high-risk, and that, if there is to be a true unionist approach between this Government and the Welsh Government, it is completely right that there is funding to flatten those tips, which were created long before the devolution settlement? Do the Government recognise that the memory of Aberfan lives on in those who are alive today—people such as Mansel Aylward, who, as a medical student, crawled into the school and pulled out a child alive?

Viscount Younger of Leckie: Indeed—we are reminded by the noble Baroness once again about Aberfan. She is right that there are 327 pits in the higher-risk categories, C and D; however, they are deemed to be safe. On her question about dealing with the coal tips, it is very challenging and rather dangerous to do anything with them because remediation—for example, smoothing them out—is much more challenging in Wales than it is for the other 4,000 around the UK.

Lord Anderson of Swansea: My Lords, this is a central government responsibility. The Minister is right to point out that it was the horrific tragedy of Aberfan that triggered the re-greening of the countryside, the coal tips and the valleys in Wales. Much has been done, very successfully, but much remains to be done; the figures have been given by my noble friend Lady Wilcox. Surely the Minister recognises that this problem pre-dates devolution, and central government must now accept its share of responsibility.

Viscount Younger of Leckie: I am going to push back at the noble Lord and say once again that the Welsh Government are more than adequately funded to manage their devolved responsibilities. They can pay for coal-tip maintenance. Informed by the independent Holtham commission’s recommendation, the inclusion of a needs-based factor in the Barnett formula provides the Welsh Government with at least £115 per person for every £100 of equivalent funding per person in England.

Lord Forsyth of Drumlean: My Lords, might it be worth my noble friend reading the report into the Barnett formula, which was produced by a special Select Committee of this House, on the recommendation of the much-missed Lord Barnett? It concluded that Wales got a very bad deal indeed and recommended that the Barnett formula be replaced by funding based on need, which would advantage Wales and perhaps deal with the systemic problem that the Barnett formula pre-dates devolution but, as the committee report made clear, Wales loses out because of that formula.

Viscount Younger of Leckie: I reiterate that there are no plans to reform the Barnett formula, and that spending per head in Scotland, Wales and Northern  Ireland is higher than the UK average, broadly reflecting that the costs of providing public services are also higher. The whole point of the Barnett formula is that an area experiencing a downturn can be supported by other areas, rather than being dependent on local economic conditions.

Bishop of Leeds: My Lords, the Minister has referred a couple of times to the funding to the Welsh authorities as “adequate”. Can he enlighten us as to how adequacy is defined?

Viscount Younger of Leckie: I will define what I see as being adequate. The Welsh Government have more than enough to deal with the very important subject of coal-tip safety.

Baroness Humphreys: My Lords, south Wales coalfields in particular made a massive contribution to the wealth of the UK over the years, with 40% of the UK’s coalfields being in Wales. We have already heard how climate impacts are increasing the risks that disused coal tips pose to our Welsh communities. Residents believe that the UK Government have a legal and moral responsibility to work with the Welsh Government to address this issue. Why can both Governments not put their differences aside, put the interests of the residents who live in the shadow of the coal tips first, and meet in the middle?

Viscount Younger of Leckie: I am not sure what differences the noble Baroness is seeing. As I said at the outset, there are regular discussions between the UK Government and the Welsh Government. Regarding legislation, the principal legislation relating to the stability and safety of mineral waste in the UK is the Mines and Quarries (Tips) Act 1969 and the Mines and Quarries (Tips) Regulations 1971, which were amended by the Mines Regulations 2014. I have made it quite clear that there is more than enough money to deal with the inspection, and the regulations ensure that those responsible for the mines ensure their safety.

Water Companies: Pollution
 - Question

Baroness Jones of Whitchurch: To ask Her Majesty’s Government what plans they have, if any, to seek to limit the bonuses of the executives of water companies responsible for persistently polluting rivers and waterways with raw sewage; and in what circumstances they would consider implementing such plans.

Lord Benyon: My Lords, the pollution of rivers and waterways is unacceptable. The Government have set new environmental commitments for water companies. Since producing its report, Putting the Sector Back in Balance, and the  board leadership principles, Ofwat has required companies to link executive performance-related pay to customer outcomes. The Government expect regulators to take strong action against polluters. Ofwat will respond to the recent EAC recommendations on executive pay in due course.

Baroness Jones of Whitchurch: My Lords, we have debated the scandal of illegal sewage dumping and misreporting of incidents by the water companies many times in this Chamber. The Minister will know the depth of anger that exists among the wider public. The Commons Environmental Audit Committee and many environmental groups now want action on the remuneration and bonuses of senior executives as the fining of the water companies as a whole clearly has proven ineffective. However, the chairs of Ofwat and the Environment Agency have said that they cannot act until they are given extra powers to do so. What further evidence, if any, can the Minister possibly need that we need to take this action now, given the scale of the problem, and why do we not give the regulators those additional powers that they need now to take the sort of action that everybody is crying out for?

Lord Benyon: My Lords, the regulator, Ofwat, produced the report Putting the Sector Back in Balance and the board leadership and principles reports. These require the water companies to improve their corporate and financial behaviours, including by being transparent about how executive performance pay and dividends relate to the services for customers. They put that in place through the board leadership, transparency and governance principles, which will be effective in tackling the problem.

Lord Kirkhope of Harrogate: My Lords, I declare an interest as a former director of a water company—but a water supply company, not a company taking waste. I ask my noble friend to confirm that, within the water industry, given the number of companies that need to extract water from rivers to supply their consumers, there is considerable pressure on the companies that take waste to clean up their act. Within the industry itself, there is considerable pressure to act.

Lord Benyon: There are enormous challenges for the water industry, not least in the south and east of England, where there is a real challenge in terms of a shortage of water at certain times. The Government, working with the regulators, with the extra powers that we now have through the Environment Act, are driving water companies, both suppliers and providers of sewerage and wastewater services, with the means they need to address those challenges.

Baroness Bakewell of Hardington Mandeville: My Lords, although Southern Water has been fined for the unlicensed discharge of sewage into waterways, no other water company has so far been penalised. Unless the management of water companies are personally financially penalised, nothing will improve. The chief executive of Severn Trent was paid £2.8 million in 2020. When are the Government going to get tough on this revolting practice and ensure that the polluter pays?

Lord Benyon: My Lords, the “polluter pays” principle was clearly defined in the Environment Act. It is applicable where there is evidence or potential of environmental harm or negative environmental impact. The “polluter pays” principle is vital in cleaning up our rivers. Measures in the Environment Act and the strategic policy statement by Ofwat are driving a better solution for this very serious problem which, as has been rightly pointed out, is an affront not just to us in this House but to the wider public in well.

Lord Anderson of Swansea: My Lords, what sanctions are available to counter the massive failures by the water companies in terms both of the illegal spillage of sewage and the failures to invest adequately?

Lord Benyon: There are a number of sanctions and Ofwat is very clear about them, but one thing we did not have was data. In 2013, we discovered that there was information about only 10% of sewage outflows. That has now risen to 80%, and by next year we will have 100% of all outflows fully available. That transparency means that ordinary members of the public as well as regulators can understand from the water company what is going on and take action.

Duke of Wellington: My Lords, the Environment Agency recently announced that it did not have sufficient resource to investigate many of the discharges of sewage. Following the passing of the Environment Act, would Ministers be prepared to consider giving guidance, or more of a direction if they can, to the Environment Agency to divert resources from other departments to the investigation of sewage discharges, which are of such concern to the public?

Lord Benyon: I pay tribute to the noble Duke for his work during the passage of the Environment Act. The Environment Agency has risen to the challenge of innovating to use maximum monitoring and inspection coverage with the use of drones and geospatial mapping tools. Like any organisation, it can always do more with more, but it is prioritising. It is also developing its river surveillance network, which will make better use of data through a catchment-based approach, meaning that it will be able to target its resources better. Fines are being put in place on water companies, the largest of which was a £90 million fine against Southern Water. So action has been taken, and more will be taken as this problem is dealt with.

Baroness McIntosh of Pickering: My Lords, will my noble friend agree to make water companies statutory consultees so that, when an application for a major housing development is made, the wastewater does not enter antiquated sewer pipes thus causing sewage spills in nearby rivers, which causes the problems that the noble Duke, the Duke of Wellington, has rightly identified? If we do not do more at the front end when a housing application is made, this problem will continue to grow.

Lord Benyon: I have sympathy with my noble friend’s points. This was a recommendation of the Pitt review, following the floods in 2007. I absolutely concur  that we have to link planning with the provision. Many new houses are tapping into Edwardian sewerage systems, which are inadequate. We have to make sure that water companies have the resources that they need and that the planning system is fit for purpose in tackling this.

Foreign Interference: Immigration, Asylum and Nationality Act 2006
 - Private Notice Question

Lord Alton of Liverpool: Asked by Lord Alton of Liverpool
To ask Her Majesty’s Government what steps they are taking to investigate reports that Christine Lee obtained amendments to the Immigration, Asylum and Nationality Act 2006 on the behalf of the government of China.

Baroness Williams of Trafford: My Lords, in a Statement in the other place on 17 January, my right honourable friend the Home Secretary explained:
“the parliamentary authorities, following careful … discussion with MI5, issued an alert to Members of Parliament—MPs and peers—alerting them about specific individuals involved in … political interference.”—[Official Report, Commons, 17/1/22; col. 23.]
It is concerning that someone who has knowingly engaged in political interference activities on behalf of the Chinese Communist Party has targeted British parliamentarians. However, I know that noble Lords will understand that I cannot comment in detail on the work of our Security Service.

Lord Alton of Liverpool: I am grateful to the noble Baroness for her reply, but, given the seriousness of the claim that someone now publicly identified by MI5 as a Chinese Communist Party agent, operating across the two Houses of Parliament, successfully subverted our legislative programme by persuading Members of your Lordships’ House to table amendments to an Act of Parliament, can the Government at least please say what action they would take to establish whether this actually occurred, who it involved and what range of disciplinary action they will consider? Does she agree with me that, through its sanctions on individual parliamentarians and now the alleged manipulation of our statute book, the Chinese Communist Party has shown itself willingly and brazenly to attack our Parliament? Does she agree that we should leave nothing off the table in instituting a broad-based inquiry, including the intrusion into Select Committees of witnesses with links to hostile foreign powers? Does she also agree that we should strenuously defend the integrity of this institution and indeed our democracy?

Baroness Williams of Trafford: I agree with much of the sentiment of what the noble Lord is saying. He will understand that what I can say today is limited, but I will address what HMG are doing to tackle these types of threats. The Cabinet Office is leading on this, and it co-ordinates the Government’s  overall response to countering state threats. We are making the UK and its overseas interests safer by strengthening our ability to deter, withstand, respond to and recover from state threats. We are looking to deliver a step change in our approach to them. Our current review of the countering state threats strategy aims not only to strengthen our defences and manage the risk to the UK but to take a much more assertive and creative approach to the international arena to defend our strategic advantages over our adversaries. I have to stop there because I have to stop short of intelligence matters.

Lord Cormack: My Lords, one understands that, but, when inquiries are complete, will the Government make a Statement, not necessarily going into details but saying whether there is substance in these allegations?

Baroness Williams of Trafford: I do not know about that because that is pre-empting any investigation that may go on—but, as my noble friend knows, I am always very willing to say what I can say at the Dispatch Box to your Lordships’ House.

Lord Coaker: My Lords, the Minister has just said to this Chamber that what we have witnessed and seen is a state threat to our country and its institutions. I would respectfully say to her that it is a little bit more than concerning—it is a really worrying development. In a Statement in the other place, the Minister said that the person had acted covertly and is involved in “political interference activities” in the UK, and investigations, including with MI5, are ongoing. Allegations have also been made that Ministers did not respond to warnings they were given. Can the Minister reassure this House that the results of the ongoing investigation will be reported to Parliament and Parliament will be an opportunity to debate it, and that that will be done quickly—as soon as possible?

Baroness Williams of Trafford: I hope that the noble Lord will be assured that I will report what I can report to this House, and in a timely manner.

Baroness Smith of Newnham: My Lords, the Minister referred to these “types of threat”. The question from my noble friend Lord Alton was about a specific individual. These “types of threat” seems to suggest that something more systematic within Parliament may be seeking to undermine our institutions. What work are Her Majesty’s Government doing to ensure that parliamentarians can be supported in our work so that we are not vulnerable to those who seek to undermine our democracy?

Baroness Williams of Trafford: I can confirm to the noble Baroness that the Home Office, together with the police and Crown Prosecution Service, have for some time been working on potential measures to help manage the risks posed by this type of activity.

Lord Stirrup: My Lords, this is an egregious incident but a far from isolated one. China has a strategy and campaign plan for remaking the international  order to suit itself. All the UK seems to have is a list of often mutually exclusive aspirations set out in the integrated review. When will the Government develop a coherent strategy for their approach to China, as recommended by your Lordships’ International Relations and Defence Committee in its recent report?

Baroness Williams of Trafford: I can say to the noble and gallant Lord that we are making the UK and its overseas interests safer by strengthening our ability to deter, withstand, respond to and recover from state threats. Clearly, we have legislation coming forward to that end. In March 2020, we publicly confirmed the existence of the joint state threats assessment team, which was established to monitor and improve our understanding of state threats.

Lord Purvis of Tweed: My Lords, the resilience of Parliament is of fundamental importance to our democracy, but this is now the third named individual about whose subversion activities parliamentarians have been informed. However, the Government seem to be operating on a reactive basis. Would not it be better for the resilience of Parliament if the Government facilitated regular proactive briefings to senior parliamentarians and committee chairs in particular, so that we are aware of subversive activities—whether the activities of Chinese individuals or, as Chatham House indicated before China, the very proactive work of Russians and those from former Soviet Union countries?

Baroness Williams of Trafford: My Lords, I think that the fact it was the Speaker who was alerted to this means that various agencies are working together to identify threats and bring them not only to my department’s attention but, obviously, to that of the Lord Speaker and Parliament. That work is ongoing, some of which I can discuss and some I cannot, but it is ongoing work.

Lord Shinkwin: My Lords, can my noble friend confirm that Miss Lee, as a naturalised British citizen, will not be allowed to leave the UK, so that she can appear before a parliamentary inquiry and give evidence, as was suggested by my noble friend Lord Alton of Liverpool?

Baroness Williams of Trafford: I am sorry to say to my noble friend that unfortunately, I cannot comment on individual cases.

Baroness O'Loan: Can the Minister assure the House that any Member of your Lordships’ House found guilty of using their position to aid and abet a hostile nation committing what the Foreign Secretary has called “genocide” against the Uighurs in Xinjiang will be expelled from this House?

Baroness Williams of Trafford: My Lords, that would be a very serious matter indeed, were that to transpire. As she will know, we have a number of mechanisms in place, should that be the case, to carry out some of the heaviest sanctions, including expulsion.

Lord Hamilton of Epsom: My Lords, should the Liberal Democrats not be particularly expert on the question of Russian agents and spies, because it was a Liberal Democrat MP who had a research assistant who was accused of being a Russian agent? When questioned about it, he said, “Oh, I knew she was a Russian spy; she wouldn’t have slept with me otherwise”.

Baroness Williams of Trafford: I must confess that I have never heard that tale, but what this confirms is that we all need to be very vigilant and careful about who attempts to influence us in this place, particularly when we are bringing legislation forward. I cannot really comment on my noble friend’s tale.

Lord Pannick: My Lords, I have listened very carefully to the Minister’s answers, and I am really puzzled as to why she cannot give an affirmative answer to my noble friend Lord Alton’s question on whether the Government and government agencies are investigating whether there is any substance to Miss Lee’s assertions that she has used her influence in relation to Members of this House.

Baroness Williams of Trafford: My Lords, it is because I cannot do so at this point.

Lord Austin of Dudley: My Lords, I am really surprised that there is not much more outrage about this. It was reported years ago that this woman was giving huge amounts of money to a Front-Bencher of one of the parties. She has been hanging around No. 10 and was given an award by the Government. She has given money to the Lib Dems as well—she has been showering money all over the place, it seems—and she claims that she was influencing legislation in your Lordships’ House. Surely, we need a really wide-ranging inquiry to find out exactly what has been going on and to make sure that this can never happen again.

Baroness Williams of Trafford: My Lords, the noble Lord has cited lots of allegations. As I said to the noble Lord, Lord Pannick, I cannot comment at this point. I have to leave it there.

Baroness Bennett of Manor Castle: My Lords, a number of questions have focused on preventing further similar cases. Does the Minister agree that the only way we can prevent similar instances is if we stop individuals and companies being able to donate large amounts of money to political parties and individuals? That way, people will know that politics cannot be bought.

Baroness Williams of Trafford: There are very specific rules on foreign donations. I am sure that the noble Baroness knows that.

Lord Craig of Radley: My Lords, what representations have Her Majesty’s Government made to the Chinese Government about this affair?

Baroness Williams of Trafford: I say to the noble and gallant Lord that where serious matters are brought to our attention, we do not hesitate to bring them up with foreign states.

Lord Wallace of Saltaire: My Lords, the ISC’s Russia report referred explicitly to infiltration of political parties. When are the Government going to take further action in response to that report? They have been remarkably slow in publishing it and then in following it up.

Baroness Williams of Trafford: My Lords, I am sure that that will be done in due course.

Lord Judge: This may not be a question that the Minister can possibly answer, but I am going to raise it so that the House can consider it. Are the relevant rules about Parliament sufficient to prevent improper involvement and influence?

Baroness Williams of Trafford: I am most grateful that the noble and learned Lord has asked that question because I think we should all ask ourselves that when bringing forward matters from lobby groups and elsewhere, to ensure that there is propriety in what we do. I am talking particularly about financial propriety and the sources of that lobbying. There is possibly more to be done in this area.

Lord Campbell of Pittenweem: My Lords, I have some sympathy for the Minister in the circumstances she has been dealing with, but given, as has already been mentioned, that the Intelligence and Security Committee made recommendations in relation to Russian activity—and given the present context, particularly Russia’s attitude towards Ukraine—is it not time that these recommendations were implemented?

Baroness Williams of Trafford: My Lords, I am sure that those responses, and implementation of the recommendations that the Government agree with, will be forthcoming.

Lord Browne of Ladyton: My Lords, the Intelligence and Security Committee is presently conducting an inquiry into national security issues relating to China. Will the Minister or other Ministers be able to answer these questions in the context of the Intelligence and Security Committee?

Baroness Williams of Trafford: My Lords, the noble Lord has strayed way beyond my purview for today, but I will certainly speak to colleagues who might be able to give better answers to noble Lords, certainly on the ISC.

Lord McDonald of Salford: My Lords, following on from my noble and learned friend Lord Judge’s question, I understand the outrage in your Lordships’ House in this case, but can the Minister tell the House  who adjudicates the line between political interference and the legitimate lobbying that all embassies do in London?

Baroness Williams of Trafford: I am sure the noble Lord is well placed to answer that question, but he wants me to do so. Sometimes it is a matter of judgment on what we do, how we do it and the transparency with which we do it. In different contexts, those can be different.

Communications and Digital Committee
 - Membership Motion

The Senior Deputy Speaker: Moved by The Senior Deputy Speaker
That, as proposed by the Committee of Selection, Lord Hall of Birkenhead, Baroness Harding of Winscombe and Lord Young of Norwood Green be appointed members of the Select Committee, in place of Viscount Colville of Culross, Lord Gilbert of Panteg, Lord Stevenson of Balmacara; and that Baroness Stowell of Beeston be appointed chair of the Select Committee.

Lord Gardiner of Kimble: My Lords, this Motion and the other Motion standing in my name before your Lordships give effect to the rotation rule which is applied each January following a meeting of the Committee of Selection. The rotation rule operates to secure a regular turnover of Select Committee memberships. Members rotating off Select Committees, who include several Select Committee chairs, have served their full term under the rotation rule. I take this opportunity to thank them for their contribution and service to these committees. I beg to move.
Motion agreed.

Conduct Committee
 - Membership Motion

The Senior Deputy Speaker: Moved by The Senior Deputy Speaker
That, as proposed by the Committee of Selection, Lord Blair of Boughton, Lord Garnier and Baroness Manningham-Buller be appointed members of the Select Committee, in place of Baroness Anelay of St Johns, Lord Brown of Eaton-under-Heywood and Lord Mance; and that Baroness Manningham-Buller be appointed chair of the Select Committee.

Lord Gardiner of Kimble: My Lords, the amendment from the noble Lord, Lord Cormack, raises a crucial issue but it is unrelated to the appointment Motion. I am moving the Motions in my capacity as chair of the Committee of Selection. I therefore hope noble Lords will accept that I do not and am not in a position to speak for the Conduct Committee, which is represented in your Lordships’ House by its chair. I will of course listen to what the noble Lord has to say and draw his remarks to  the attention of the chair of the Conduct Committee, assuming that the noble Baroness, Lady Manningham-Buller, is indeed appointed. I beg to move.

Amendment to the Motion

Lord Cormack: Moved by Lord Cormack
At the end insert “and as its first task it seeks to ensure the protection of freedom of speech so that nothing can prevent the full and frank exchange of honestly held opinions in the course of Parliamentary proceedings.”

Lord Cormack: My Lords, I am most grateful for what my noble friend Lord Gardiner of Kimble has said. I could ask no more in the circumstances. We do not have points of order in your Lordships’ House, and I am taking the earliest possible opportunity to raise an issue which potentially affects every single Member of your Lordships’ House. I believe it is incumbent on those of us involved in what I will describe that we should seek to do this.
Last week, my noble friend Lord Blencathra moved an amendment to the Police, Crime, Sentencing and Courts Bill, the aim of which was to protect women prisoners from men who self-identify as women and are housed in women’s prisons. The noble Baronesses, Lady Meyer and Lady Fox of Buckley, and I supported it. As a result, all four of us received letters from the Commissioner for Standards saying that our speeches had been complained about. He had dismissed the complaints on a technicality—the grounds that they were third-party complaints and therefore not permissible. The four of us have written to the commissioner because we are deeply concerned by the implications of this decision, as it could give the impression that, because he dismissed the complaints on a technicality, there may have been some substance in the allegations.
Parliamentary privilege is one of the bulwarks of democracy. In the sixth edition of that splendid guide which many of us know, How Parliament Works, written by our colleague the noble Lord, Lord Lisvane, and a former clerk in this House, Rhodri Walters, they explain the importance of parliamentary privilege. It is a guarantee of freedom of speech within both Houses of Parliament and our committees. Anything said on the Floor of this House or in Committee is protected as a result of Article 9 of the 1688-89 Bill of Rights, which is one of our foundation documents. It states:
“That the Freedome of Speech and Debates or Proceedings in Parlyament ought not to be impeached or questioned in any Court or Place out of Parlyament.”
There can be very few subjects which are more relevant or important to your Lordships’ House. There is no doubt in the minds of those of us who received these letters that the complaints against us were designed to silence us, and that has very sinister implications.
Members of Parliament and Peers must be able to speak up and express any opinion on a public issue without fear of legal action. This does not excuse the frivolous. Your Lordships’ House and the other place can deal with Members whom they believe have abused parliamentary privilege. That has occurred in the past, but we must be free. Our civil liberties in this country  depend to a large degree on that power. That is why I am suggesting—I am doing no more than that, and I am grateful to my noble friend for what he said—that the new Conduct Committee, under its new chairman, should address this issue as a priority. Without freedom of speech there can be no free Parliament and no genuine parliamentary democracy.
In our speeches last week—I urge noble Lords who are concerned about this matter to read the four brief speeches—we were not in any way seeking to bully. I am glad to see the noble Baroness, Lady Jones of Moulsecoomb, who has been prominent in these matters, nodding her head. In this counterculture era, it is vital that no-one seeks to bully those who speak in either House. I beg to move.

Baroness Hussein-Ece: My Lords, I think I am the only member of the Conduct Committee in the Chamber, so may I say that this is the first I have heard of this and express my disappointment. I support everything that the noble Lord, Lord Cormack, said. I always listen very carefully to him and I have enormous respect for his contributions. I assure him that this subject—the freedom of expression and of opinion—has been debated by the Conduct Committee, and it is understood and agreed that it is in no way a breach of the Code of Conduct. I am pleased to hear that the commissioner has rejected the complaints, and that is the way it should be.
I want to give a reassurance, because this Motion refers to our committee’s members and its new members; we are looking forward enormously to working with them. They are clear on this matter, as was the noble and learned Lord, Lord Mance. I can still hear him saying very clearly that freedom of opinion in a view is in no way a breach—it cannot be. When it transcends into bullying, harassment, sexual harassment or misconduct —trying in any way to bully or belittle members of staff or the public—then it would be investigated. Expressing a view in this Chamber would never constitute that. The four lay members are clear on that as well. We are all agreed on it; there is no question of it, so I give that reassurance to the noble Lord and to the House.

Lord Lisvane: My Lords, I hope your Lordships will indulge me just for a couple of minutes. The Senior Deputy Speaker has my sympathy because, as he acknowledged a moment ago, these are Motions of nomination. They do not go to the orders of reference of the committees concerned.
Freedom of speech in Parliament, as the noble Lord, Lord Cormack, has said, underpinned by Article 9 of the Bill of Rights, is of truly inestimable value. He is right to voice any unease he may feel at the possible chilling effect which may be observed. Perhaps I may call him my honorary noble friend, not just because of the kind reference to my book a moment ago but because, over half a century, I have seen him at first hand demonstrate his zeal for empowering and protecting Parliament, which I fancy underlies the remarks that he made a moment or two ago.
On this occasion, I hope that his unease will be assuaged by the wording of paragraph 29 of the Code of Conduct, which the noble Baroness referred to a second ago. It says that
“the Commissioner and the Conduct Committee shall … recognise as a primary consideration the constitutional principle of freedom of speech in parliamentary proceedings, including but not limited to the need for members to be able to express their views fully and frankly in parliamentary proceedings”.
I am sure, as the Senior Deputy Speaker said in his initial remarks, that the exchanges today will be brought to the attention of the Conduct Committee.

Lord Reid of Cardowan: My Lords, I pass no comment on the original speeches that were apparently the basis of the complaints of which the noble Lord, Lord Cormack, and others were notified. I have not discussed this matter with the noble Lord but support him absolutely 100% on this; it is very easy to find ourselves in a position where the fundamental principle of parliamentary freedom of speech is incrementally eroded.
To my memory, I voted against the Labour Government only once on a whip. I remember it well: it was an amendment put forward by my good friend Jack Straw to a Government Bill, which would have allowed anything MPs said in Parliament on a particular subject—MPs’ expenses—to be used in a court of law. I could see the motivation behind it, the objections that would be raised and the pressure that was put on him, but I thought it was a fundamental mistake to allow that. Once you go the inch, you have in fact gone the whole mile as regards this.
It is not sufficient to stop at saying that this should not be part of any proceedings. It should not be notified to Members of Parliament, because the effect of notification is to carry out the inhibition, bullying and so on that a formal move would result in. Will the Senior Deputy Speaker pass on the comments and discussion on this? It is necessary for the new committee not only to reaffirm the freedom of speech of Members of Parliament but to change the operation, so that they are not notified if something is complained exclusively about what a Member has said in this House.

Lord Forsyth of Drumlean: My Lords, I am not at all reassured by what we have been told about the Conduct Committee. I am uniquely advantaged in this House in that I am not a lawyer, but I did understand that what was said in this Chamber or the other place was privileged, and I understood that this is fundamental and goes to the root of what we are about. But I discover that we have agreed that the conduct commissioner, because they are an officer of the House, is able to investigate remarks made in this Chamber in respect of other Members of this House. We have agreed that. That came as astonishing news to me, and I doubt there were very many Members of this House who were aware that that was what we had agreed to.
I do sympathise with my noble friend Lord Gardiner, because this was nothing to do with the appointments. But there have been four colleagues, as my noble friend Lord Cormack said, who were written to. They get a letter from the commissioner that says: “I have had a complaint about you. Here is a copy of the letter I sent. The letter sent to the member of public says  I am not investigating this because you are a third party and not within the scope.” But what we would like to see is a letter that says: “I am not investigating this, because what people say in this Chamber is not something for me.” But we, as a House, have agreed to this in the small print. I was astonished when I went to see one of the clerks, who very helpfully explained the position.
If someone did bully me in this House and I felt aggrieved by it, or if someone said something I found terribly offensive, I would like to think the House itself, with its own standing orders and procedures, could deal with it. There is an issue here. I do not want to broaden this thing, but there is a kind of mission creep going on with these commissioners and changes in the codes of conduct. We have just had a debate and discussion about improper influence of this House, and it is right that we should deal with that, but these changes have resulted in some really distinguished and able Members of this House, with complete integrity, deciding that they have to leave. We need to balance maintaining the rights and responsibilities of this House and people’s ability to participate in it with our ability to deal with improper behaviour.
It is not just in respect of this House—I find it difficult to see how this will work where it also applies to committees of this House. Does that mean witnesses could complain about us bullying them with our questioning? Sometimes people have complained about me being aggressive in asking questions—I cannot think why—so should I be thinking about not giving the Chancellor a hard time when he comes before the Economic Affairs Committee?
There is a serious issue here, and it is not enough to ask the chairman of the committee to consider this. It is a matter for this House as a whole, and it needs to be put right. I am told, on making inquiries, that there is a proposal to extend this in the other place. Well, that is a matter for them, but it says to me it is high time that this high court of Parliament stood up for itself.

Baroness Jones of Moulsecoomb: My Lords, as the noble Lord, Lord Cormack, mentioned me in his speech as nodding along, I thought I better clarify. I support him completely. I nearly did not come in to listen to this, because I thought it was a piddling point of order of some sort, even though it was labelled “free speech.” But having heard it, I am delighted I came in. I fully support the noble Lord; I hope he does not feel he needs to put this to a vote, because I think the spirit of the House is entirely behind him, and I thank him. I heard those speeches; they were not inappropriate in any sense.

Lord Campbell of Pittenweem: It would be a brave person who sought to bully the noble Lord, Lord Forsyth; that is certainly true. I support the noble Lords, Lord Reid and Lord Forsyth. I also sat through the debate in question because I was taking part in the immediate succeeding business. There was nothing in any of the speeches that, in my judgment, entitled anyone to express a complaint. You might not have agreed with what was being said, but that is not the same.
Respectfully, it seems to me that the commissioner erred. His response should have been not to entertain in any circumstances the public complaints which were made to him. If it is to be done on the basis of a technicality, that is almost certain to enthuse certain other people to write and say, “Well, what was the technicality, so we can do better next time?” This is a matter of such fundamental principle, as many of those who have contributed to this debate have made clear, and it is for this Chamber—and indeed the other Chamber, if so advised—to ensure that it does not depart from a principle which is right at the very heart of the democracy of this country.

Lord Judge: My Lords, may I say just four words? This will not do.

Lord Sandhurst: My Lords, very simply, this is a question of jurisdiction. If the current practice of the House is that we have—certainly before I was a Member—given jurisdiction, whether knowingly or not, to the commissioner to investigate, that is absolutely contrary to Article 9 of the Bill of Rights. He now has power under this to investigate. If we have done this by some sort of side wind, that power must be taken away. He must not have the jurisdiction to do it. Unless it is following a complaint, it is done on the Motion of the House, specifically on a case-by-case basis. As I understand it, it is open to this House to direct that there be an investigation into the conduct of a Member, but that must not happen simply because someone, somewhere, makes a complaint. It is an important jurisdiction question. This power should be taken away from the commissioner, unless in a specific case he or she is asked to investigate as a servant of the House. But it must be case by case. It should never happen and should not relate to things which are said in the House unless they are clearly out of order, offensive, criminal or something else.

Baroness Hoey: My Lords, I support completely what the noble Lords, Lord Cormack and Lord Forsyth, have said. I am here to speak because, unfortunately, the noble Baroness, Lady Fox—who was one of the recipients of this letter—has had to leave for Grand Committee. She is a new Member, and she is a very strong woman, as we all know, yet getting a letter from the standards commissioner affected her. It affects anyone who gets a letter from the standards commissioner, even if, as has been said, it goes on to say that they are not going to investigate. It should have been put in the way that the noble Lord, Lord Forsyth, said.
I know that the noble Lord, Lord Gardiner, cannot accept this amendment, but it seems to me a very common-sense amendment which should be accepted widely. It would allow the new committee to be able to take this as a first matter of priority.

Lord Gardiner of Kimble: My Lords, it has been a privilege to listen to the very powerful points made first by the noble Lord, Lord Cormack, and then by all noble Lords who have spoken. I have to reiterate—and the generosity of the House is such that I know noble Lords understand this—that I am moving appointment Motions in my  capacity as chair of the Committee of Selection. I cannot speak for the Conduct Committee, although we heard from one of its members. Of course, these are ultimately all matters for the House.
I assure noble Lords, because this is within my capability, that I will refer today to the incoming chair of the Conduct Committee—assuming that the noble Baroness, Lady Manningham-Buller, is appointed—the remarks that have been made during this important but short debate so that matters can be considered further. With that promise, I hope that the noble Lord, Lord Cormack—formerly my noble friend—will feel able to withdraw his amendment and that we can appoint Members to this committee who I think will be very important and helpful to these further considerations.

Lord Cormack: My Lords, I am extremely grateful to every noble Lord who has taken part in this brief but important debate. I am grateful too to my former noble friend for what he has just, as I was for what he said at the beginning. There is no subject that is more important to Members of either House than freedom of speech: the ability to say what they honestly think and feel about important subjects. As was mentioned by the noble Lord, Lord Campbell of Pittenweem, that does not mean they agree with each other. Vigorous debate is essential to a healthy democracy.
May I also say how much I agreed with the noble Lord, Lord Reid, and others who made the point that the commissioner should not write to Members? The noble Baroness, Lady Hoey, was correct in what she said about our vigorous and outspoken new colleague who was taken aback by this—and I am sure would not mind me saying so. People should not be troubled with letters from the commissioner if somebody is writing about what is said on the Floor of the House.
I will take the advice of my friend, the noble Baroness, Lady Jones of Moulsecoomb, because I think the House has spoken. There has not been any dissentient voice. In seeking to withdraw my amendment, I am confident that my noble friend Lord Gardiner will do precisely what he has promised and that colleagues on the Conduct Committee will take the sense of the House as it has been voiced vigorously this afternoon. I beg to withdraw.
Amendment withdrawn.
Motion agreed.

Constitution Committee
 - Membership Motions

The Senior Deputy Speaker: Moved by The Senior Deputy Speaker
That, as proposed by the Committee of Selection, Lord Falconer of Thoroton and Lord King of Bridgwater be appointed members of the Select Committee, in place of Lord Dunlop, Lord McAvoy and Baroness Taylor of Bolton; and that Baroness Drake be appointed chair of the Select Committee.
That, as proposed by the Committee of Selection, Lord Cunningham of Felling, Lord McLoughlin and Lord Rooker be appointed members of the Select Committee, in place of Baroness Andrews, Lord Blencathra and Lord Rowlands; and that Lord McLoughlin be appointed chair of the Select Committee.
That, as proposed by the Committee of Selection, Lord Griffiths of Fforestfach, Baroness Noakes and Lord Rooker be appointed members of the Select Committee, in place of Lord Forsyth of Drumlean, Baroness Harding of Winscombe and Baroness Kingsmill; and that Lord Bridges of Headley be appointed chair of the Select Committee.
That, as proposed by the Committee of Selection, Lord Grantchester and the Duke of Wellington be appointed members of the Select Committee, in place of Lord Cameron of Dillington and Lord Puttnam.
That, as proposed by the Committee of Selection, Lord Altrincham and Lord Tomlinson be appointed members of the Select Committee, in place of Lord Campbell-Savours and Lord Colgrain.
That, as proposed by the Committee of Selection, Lord Cromwell and Lord Trefgarne be appointed members of the Select Committee, in place of Lord Curry of Kirkharle and Baroness Noakes.
That, as proposed by the Committee of Selection, Lord Udny-Lister be appointed a member of the Select Committee, in place of Lord Robathan.
That, as proposed by the Committee of Selection, Lord Wood of Anfield be appointed a member of the Select Committee, in place of Lord Mendelsohn.
That, as proposed by the Committee of Selection, Lord Blencathra, Baroness Coussins and Lord Taylor of Holbeach be appointed members of the Select Committee, in place of Baroness Campbell of Surbiton, Lord Lang of Monkton and Lord Smith of Hindhead.
That, as proposed by the Committee of Selection, Baroness Anelay of St Johns, Lord Butler of Brockwell, Baroness Crawley, Lord Dannatt, Lord Snape and Viscount Stansgate be appointed members of the Select Committee, in place of Lord Brennan, Baroness Healy of Primrose Hill, Baroness Henig, Lord King of Bridgwater, Lord Laming and Baroness Lane-Fox of Soho.
That, as proposed by the Committee of Selection, Baroness Humphreys, Baroness Sanderson of Welton and Lord Sherbourne of Didsbury be appointed members of the Select Committee, in place of Lord Geddes, Baroness Thomas of Winchester and Viscount Ullswater.
That, as proposed by the Committee of Selection, Lord Porter of Spalding and Baroness Sater be appointed members of the Select Committee, in place of Baroness Wyld and Lord Young of Cookham.
That, as proposed by the Committee of Selection, Baroness Brown of Cambridge and Lord Rees of Ludlow be appointed members of the Select  Committee, in place of Lord Kakkar and Lord Patel; and that Baroness Brown of Cambridge be appointed chair of the Select Committee.
That, as proposed by the Committee of Selection, Lord De Mauley, Lord Powell of Bayswater and Lord Rowlands be appointed members of the Select Committee, in place of Lord Chartres, Lord Cunningham of Felling and Lord Sherbourne of Didsbury.
That, as proposed by the Committee of Selection, Lord Haselhurst and Lord Howard of Rising be appointed members of the Select Committee, in place of Lord Borwick and Baroness Morris of Bolton.
That, as proposed by the Committee of Selection, Lord Beith and Lord Chartres be appointed members of the Select Committee, in place of Lord Rowe-Beddoe and Baroness Scott of Needham Market.
That a Select Committee be appointed to consider to consider the planning for and delivery of adult social care services in England, and to make recommendations; and that, as proposed by the Committee of Selection, the following members be appointed to the Committee:
Andrews, B (Chair), Barker, B, Bradley, L, Carlisle, Bp, Campbell of Surbiton, B, Eaton, B, Fraser of Craigmaddie, B, Goudie, B, Jolly, B, Laming, L, Polak, L, Shephard of Northwold, B, Warwick of Undercliffe, B.
That the Committee have the power to send for persons, papers and records;
That the Committee have power to appoint specialist advisers;
That the Committee have power to meet outside Westminster;
That the Committee do report by 30 November 2022;
That the report of the Committee be printed, regardless of any adjournment of the House.
That the evidence taken by the Committee be published, if the Committee so wishes.
That a Select Committee be appointed to consider and report on the Children and Families Act 2014; and that, as proposed by the Committee of Selection, the following members be appointed to the Committee:
Bach, L, Bertin, B, Blower, B, Brownlow of Shurlock Row, L, Cruddas, L, Lawrence of Clarendon, B, Massey of Darwen, B, Mawson, L, Prashar, B, Storey, L, Tyler of Enfield, B (Chair), Wyld, B.
That the Committee have the power to send for persons, papers and records;
That the Committee have power to appoint specialist advisers;
That the Committee have power to meet outside Westminster;
That the Committee do report by 30 November 2022;
That the report of the Committee be printed, regardless of any adjournment of the House.
That the evidence taken by the Committee be published, if the Committee so wishes.
That a Select Committee be appointed to consider the Fraud Act 2006 and digital fraud, and to make recommendations; and that, as proposed by the Committee of Selection, the following members be appointed to the Committee
Allan of Hallam, L, Bowles of Berkhamsted, B, Browne of Ladyton, L, Colville of Culross, V, Gilbert of Panteg, L, Henig, B, Kingsmill, B, Morgan of Cotes, B, (Chair), Sandhurst, L, Taylor of Bolton, B, Vaux of Harrowden, L, Young of Cookham, L.
That the Committee have the power to send for persons, papers and records;
That the Committee have power to appoint specialist advisers;
That the Committee have power to meet outside Westminster;
That the Committee do report by 30 November 2022;
That the report of the Committee be printed, regardless of any adjournment of the House.
That the evidence taken by the Committee be published, if the Committee so wishes.
That a Select Committee be appointed to consider land use in England, and to make recommendations; and that, as proposed by the Committee of Selection, the following members be appointed to the Committee:
Bakewell of Hardington Mandeville, B, Borwick, L, Cameron of Dillington, L (Chair), Curry of Kirkharle, L, Goddard of Stockport, L, Grantchester, L, Harlech, L, Layard, L, Leicester, E, Mallalieu, B, Redfern, B, Young of Old Scone, B.
That the Committee have the power to send for persons, papers and records;
That the Committee have power to appoint specialist advisers;
That the Committee have power to meet outside Westminster;
That the Committee do report by 30 November 2022;
That the report of the Committee be printed, regardless of any adjournment of the House.
That the evidence taken by the Committee be published, if the Committee so wishes.
Motions agreed.

Nationality and Borders Bill
 - Order of Consideration Motion

Lord Ashton of Hyde: Moved by Lord Ashton of Hyde
That it be an instruction to the Committee of the Whole House to which the Nationality and Borders Bill has been committed that they consider the bill in the following order:
Clauses 1 to 8, Schedule 1, Clauses 9 to 22, Schedule 2, Clauses 23 to 28, Schedule 3, Clauses 29 to 41, Schedule 4, Clause 42, Schedule 5, Clauses 43 and 44, Schedule 6, Clauses 45 and 46, Schedule 7, Clauses 47 to 84, Title.

Lord Ashton of Hyde: My Lords, I beg to move the Motion in the name of my noble friend Lady Williams of Trafford.
Motion agreed.

Northern Ireland (Ministers, Elections and Petitions of Concern) Bill
 - Report

Amendment 1

Baroness Ritchie of Downpatrick: Moved by Baroness Ritchie of Downpatrick
1: After Clause 2, insert the following new Clause—“First Minister and deputy First Minister to be referred to as Joint First MinistersThe First Minister and deputy First Minister elected under the Northern Ireland Act 1998 are to be referred to as Joint First Ministers, and all references in that Act (other than to their election) to the First Minister and deputy First Minister are to be read as references to the Joint First Ministers.”Member’s explanatory statementThis new Clause provides that First Minister and deputy First Minister be referred to as Joint First Ministers reflecting their identical status, powers and responsibilities.

Baroness Ritchie of Downpatrick: My Lords, Amendment 1 is in my name. I also support Amendment 2 in the name of the noble Lord, Lord Empey. Amendment 1 would provide that the
“First Minister and deputy First Minister be referred to as Joint First Ministers reflecting their identical status, powers and responsibilities.”
At Second Reading, I indicated that the Good Friday agreement provided a level of hope and expectancy back in May 1998, and that we in Northern Ireland want
“to use the architecture of the Good Friday agreement to work together in partnership, reconciliation, parity of esteem and respect for difference. Those are the kernels we urgently need to build the political stability and resilience of government.”—[Official Report, 29/11/21; col. 1234.]
We need to revert to that position through the title of Joint First Minister for the good delivery of policies, for proper identification, for equality, for reconciliation and, in terms of that good delivery of policies and operational matters, for the people of Northern Ireland. Why do I say that? To recreate that hope and sense of fairness and equality that we all felt back in 1998.
Central to the Good Friday agreement were consensus and the principle of consent. As I said, the agreement contained the infrastructure and architecture that provided the framework for people to work together with respect, mutual understanding, trust and confidence in each other. Those basic principles were also discussed at St Andrews but there was a change of emphasis in terms of the appointment of the First and deputy First Ministers, as the noble Lord, Lord Empey, will refer to when he introduces his amendment.
Now, we need to build on this Bill and return to that vision of 1998, which created the infrastructure and architecture to manage differences and realise a better shared future based on partnership and working together in Northern Ireland. It is important that we revert to the spirit of the 1998 agreement. I believe that this amendment in my name, to which the noble Baroness, Lady Suttie, has added her name, would ensure that the Joint First Ministers are classified as such to demonstrate that they have identical status, powers and responsibilities. I firmly believe that this would confer on the people of Northern Ireland the sense of responsibility that the Northern Ireland Executive have, and it would help them to see people physically and ethically working together because, to all intents and purposes, both posts are equal. This also needs to be reflected in the way they are elected, hence my support for the amendment in the name of the noble Lord, Lord Empey.
Both amendments would provide a solution to the Government in that they would de-sectarianise the Assembly election coming up on 5 May; diminish the focus of the election on, “Make me First Minister and do not let that other party and them ones get in”; and ensure that the election concentrates on health, post-pandemic recovery, jobs, education, the economy and improving the lives of people, which is what politics should be about and which we discuss in this House and the other place on a day-to-day basis.
I note that the Minister indicated in Committee that he was sympathetic to the intent and import of this amendment but felt that, at this stage, the Bill was not the “right vehicle” as it is about the legislative commitments in New Decade, New Approach. In the past week, we have seen other commitments that were definitely outwith that agreement that were going to be made but, as I understand it, will now not be made. What is the position of the Government now? Are they and the Minister acting on their behalf prepared to accept this amendment, which would help to stabilise the institutions, diminish the volatile situation and further prevent the instability that currently exists or could exist in a post-election sphere?
If the Government cannot accept this amendment today, can the Minister give other types of assurances to your Lordships’ House about how it can be, shall we say, discussed or legislated for in terms of negotiations in the future?
I have a word of warning. My belief and understanding is that things may not be all that settled in the post-election sphere and that, therefore, it may be better to do things at this juncture to bring about that necessary political stability. In that vein, I beg to move.

Lord Hannan of Kingsclere: My Lords, I have a great deal of sympathy with the amendment that the noble Baroness, Lady Ritchie of Downpatrick, just moved, and I say that as somebody who was not a fan of the Belfast agreement when it was signed. I opposed it, I hasten to add, not on orange or green grounds but on democratic grounds—being Ulster Catholic on one side and Scots Presbyterian on the other, I always felt I had a bit of a personal stake in power-sharing. However, I did not like the way that there was no proper opposition, the way it enshrined all the parties being in office, and the implication that things would become a scramble to reward supporters of those parties with public sector positions. I lost that argument—Northern Ireland went in a different direction and there is now a consensus behind it.
However, having gone down that road, it seems, as the noble Baroness says, that this is closing a loophole. We have decided to create these two positions as effectively coequal. The only difference between them is one of nomenclature, and if that is causing a sense of inequality or, if you like, forced competition in elections, as the noble Baroness said, it seems a quite small alteration that this amendment would address. Of course, I understand that the Bill is primarily about something else but I reiterate her call and hope that my noble friend the Minister will keep it under consideration.

Lord Hain: My Lords, I too speak in support of Amendment 1 in the name of my noble friend Lady Ritchie of Downpatrick. In doing so, I will say a word or two about the fairly dangerous context that Northern Ireland politics is now in.
There is no greater or more enthusiastic supporter of devolution than I but where processes put in place for the best of motives are abused, there is an obligation on us all to rectify that. Regrettably, there have been examples in the recent past where the implementation of legislation passed at Westminster—because, for whatever reason, it could not be passed at Stormont—has been thwarted by either the DUP or Sinn Féin.
That was the case for payments for those severely injured through no fault of their own during the Troubles, which were disgracefully blocked by Sinn Féin despite being in statute as a legal obligation—as a result of an initiative taken in your Lordships’ House—until it was humiliatingly ordered to obey the law by High Court judges. It is perfectly legitimate for the DUP to oppose the protocol but it is not legitimate unilaterally to seek to block it. How can one party alone in a devolved Administration seek to block an international treaty agreed between the Government of the United Kingdom whom they support and the European Commission?
Amendment 1 seeks to improve the Bill and thus strengthen the institutions supporting devolution in Northern Ireland. I hope that the Bill will have the support of noble Lords across the House, and I particularly welcome the recent commitment in the  letter from the Minister to early commencement, as well as his Amendments 8, 9 and 10, which I support but which I will not speak to now.
However, I am concerned that, while we are discussing how best the institutions underpinning devolution can be made to function more effectively, there is a threat from the DUP to bring down those very institutions. Threats, veiled or otherwise, to collapse the Good Friday agreement institutions, whether over the outworking of the hard Brexit policy the Government disastrously pursued—supported by the DUP—despite repeated warnings about the inevitable outcome for Northern Ireland, or because the democratic process may produce a result that some parties may dislike, do not serve the people of Northern Ireland and their democratic self-government at all well.
The Government have a responsibility to do all they can to ensure that the long-term stability of Northern Ireland is not jeopardised in the way I fear is currently the case. The whole House acknowledges the Northern Ireland expertise and long experience of the Minister, the noble Lord, Lord Caine, who is not to blame for successive Secretaries of State since 2010—Julian Smith honourably excepted—failing to play the genuinely honest broker role essential for sustaining and deepening the Good Friday peace and democratic process which this amendment is designed to support.
At Second Reading, I intervened on the Government’s proposals to deal with the legacy of Northern Ireland’s past and I do so briefly again today, because I fear that this too is heading in the wrong direction and could pull down the institutions if we are not careful. We have yet to see anything of substance on the legacy legislation since the publication of the Command Paper back in July 2021, but what we do know is deeply disturbing.
Surely, the Government know that a proposal that creates an equivalence between military personnel and the people who murdered them is unacceptable? Surely, they also know that a partial amnesty covering only veterans is incompatible with both our international legal obligations and the imperatives of the Good Friday process? Surely, the Government also know that telling victims that those on all sides of the conflict who murdered their loved ones and carried out unspeakable atrocities will be able to sleep easy in their beds, while they have to live with the pain, grief and trauma of what those people did to them, is also completely unacceptable. I hope that the Minister will listen because I know he is sensitive to these matters.
This is a circle the Government should not be even trying to square. They must abandon their current amnesty plan and listen to those who are offering a truth-seeking alternative based on Operation Kenova, headed by former Chief Constable Jon Boutcher, which has been praised by victims and which, by the way, rightly includes the possibility of prosecutions if evidence unearthed leads that way, as has been the case under Kenova.
It is a notable political feat to manage to produce a legacy policy that every political party in Northern Ireland, along with every victims’ and survivors’ group, is opposed to. In the foreword to the Command Paper the Secretary of State promised a time-limited period of intensive engagement on the proposals contained in  it. He has been promising “intensive engagement” on legacy since March 2020, when he unilaterally dumped the cross-party Stormont House agreement. His understanding of intensive engagement is not even close to that which those of us on both sides of the House who have worked to see progress in Northern Ireland over many years would expect—including, I suspect, the noble Lord, Lord Caine, although I would not expect him to publicly acknowledge it.
I realise that this speech has strayed a little from the amendment in question, but I think it essential to put this on record to try to encourage rethinking by the Government, in order to enable the Minister’s objectives to progress with this Bill and ensure stability where there is danger of instability.
Where there has been engagement it has been between special advisers and “sources” in government-supporting newspapers, which received far more detailed briefings than those who will be directly affected by these ill-conceived legacy proposals. The most recent engagement of that kind, in the Daily Telegraph before Christmas, revealed that even the Secretary of State for Defence found what was being proposed unacceptable. The reality is that there has been no meaningful engagement.
When the Minister, the noble Lord, Lord Caine, winds up this debate perhaps he will be able to tell the House precisely how many engagements with the WAVE Trauma Centre and/or other victims’ and survivors’ support groups in Northern Ireland were initiated by the Secretary of State from the publication of the Command Paper in July last year to today’s date. Is the answer none, as I suspect may be the case? I understand that he may not have the detail to hand, in which case I would be grateful if he would write to me with the information as soon as he has it.
Meanwhile, in concluding, I place on record my profound disquiet, along with other former Labour Secretaries of State—including my much-respected noble friend Lord Murphy, to whom I spoke only the other day and who cannot attend these proceedings, as he would have liked to do—about the dangerous drift of government policy on Northern Ireland, which has managed the singular feat of alienating each and every one of the local political parties, the Irish Government, the United States President and the European Union: all partners, some statutory, to the hard-won Good Friday agreement. I urge the Secretary of State to change course before it is too late. Meanwhile, I strongly support this amendment.

Baroness Suttie: My Lords, although I complete share and agree with every word of the point of view expressed by the noble Lord, Lord Hain, I will none the less return to Amendment 1, which we are discussing this afternoon. The noble Baroness, Lady Ritchie, clearly spelled out the purpose of Amendment 1, to which I have added my name, and I will not repeat the many powerful points she made.
On these Benches, we believe that making the change set out in Amendment 1 and referring to the roles as “Joint First Ministers” would reflect the reality of the situation and remove an artificial and unhelpful distinction. Such a change would also do much to take  some of the heat out of the debate and allow for a more constructive and issues-based debate in the run-up to the elections to the Northern Ireland Assembly in May this year.
I understand from previous conversations with the Minister that he is open to giving proper consideration to making these changes. Does he not agree that it would be better if these changes were made sooner rather than later, and can he say when and how he intends to consult with the parties in Northern Ireland on this issue?

Lord Morrow: My Lords, I will make a few brief remarks in relation to Amendments 1 and 2. At the outset, I say that most people who live in the real world acknowledge that the Belfast agreement is a flawed piece of work. It is not perfect, and those of us who try from time to time to point out the imperfections are frowned upon as anti-democratic in some way.
I and my colleagues cannot support Amendments 1 or 2, not least because they are very much outside the scope of the Bill and the New Decade, New Approach agreement, which focused on ensuring the stability of the institutions. The appropriate vehicle for scrutinising the existing rules and appointments is the Assembly and Executive Review Committee at Stormont. This should certainly not be tagged on to the coat-tails of the Bill.
Your Lordships’ House should keep very much before it that, to put it mildly, the Northern Ireland Assembly is in a very difficult and precarious position. The protocol, which has already been referred to, has virtually put the Executive and the very existence of the Northern Ireland Assembly on life support. We were always told that nothing could move forward in Northern Ireland without the consent of the majority, and the consent of the minority. Of course, no unionist supports the protocol. But, somehow, we have been told, “Just suck it up and get on with it”.
Some time ago, when Sinn Féin sought to bring changes to welfare reform, it pulled the whole edifice down. Not only did it not get its demands at that time around welfare reform, but it then added three other demands and said that it would not go back until those were met—and nor did it go back until they were met in totality. They were steamed through the other place, and the Northern Ireland Assembly was given no say whatever. So the abuse of the cross-party and the majority of the majority and the majority of the minority has well and truly been kicked into touch.
Some of us are conversant with how decisions were agreed to assist in getting devolution done. That would not have happened if there had not been a St Andrews agreement. Again, everyone who lives in the real world recognises that. I know that some, even in this House, refuse to recognise that, but it is a fact.
The DUP is also opposed to Amendment 2. The purpose of the Bill is to legislate for measures agreed under the New Decade, New Approach deal, not to undo and tear up previous commitments at St Andrews in the absence of political consensus. It should be said that NDNA is a package, not a single item on its own, but that has been ignored to all intents and purposes.  I know that at a later stage we will hear about a very useful amendment tabled by the noble Lord, Lord Coaker, and I add that that is helpful.
Some seem to be asking for a full reset of the institutions, but we certainly are not. That is not in keeping with the spirit of what has been agreed. I said that the Executive and the Assembly are now in a very difficult place. This House should be ever mindful of that and keep it before us in all our deliberations. I reiterate that had it not been for the St Andrews agreement element of the devolution settlement then there would never have been an Executive and an Assembly at Stormont. Those who do not acknowledge that are just living in denial.
I listened intently to what the noble Baroness, Lady Ritchie, said. She said that the St Andrews agreement had changed the emphasis on the First Minister and Deputy First Minister in the Belfast agreement, or the Good Friday agreement, as some call it. I say this: the identical status never existed, even in the Belfast agreement. There was always a difference between the First Minister and the Deputy First Minister, which helped to make things happen, so it did.
Furthermore, in the last election in Belfast North we had a very hard-working, industrious full-time Member of Parliament, Nigel Dodds, now the noble Lord, Lord Dodds. What did the SDLP and Sinn Féin do? They locked horns and a cabal was formed to oust that hard-working Member of Parliament. Who did they put in? Someone who declared, “I will never attend Parliament”, but has a fully paid-for political office while continuing to run his legal business elsewhere. Is that double-jobbing? It seems that it is not, yet if someone were to sit in Parliament, the Assembly or a local council and do that, it would be. We really need to catch a grip of things and try to realise what exactly is going on. This behaviour should be called out. Not only did the SDLP and Sinn Féin come together in Belfast North; as a quid pro quo, Sinn Féin stands aside in Belfast South to help to elect the SDLP.
Let us be very careful about rushing ahead and doing things in Northern Ireland without the consent of the majority in Northern Ireland. That is exactly what is happening at the moment. We have a protocol that is strangling our economy, but that does not seem to matter. We will continue to work for the changes in the protocol—indeed, it has to go; it is a massive hindrance. It will be one of the uppermost things that will help to destroy the Belfast agreement, and indeed the Executive and the Stormont Assembly.

Lord Empey: My Lords, after that contribution it is difficult to know where to start. I begin by saying to the Minister that this is the first piece of legislation of substance that he has had to deal with. He will obviously have detected that this Bill is supposed to implement elements of New Decade, New Approach, and I suspect that he will notice the absence of references to that and its substance, as people have moved on to other things. My party is not a party to the New Decade, New Approach agreement and did not support it. There are elements within it that are okay, but we did not agree with the totality of it. Of course, the Bill is before us only because various abuses of the system  have taken place over the years, and this particular piece of legislation is trying to patch up holes in the bucket.
There are differences between the amendment proposed by the noble Baroness, Lady Ritchie, and the amendment from my noble friend Lord Rogan and me. One deals with how to describe the offices of First Minister and Deputy First Minister, and the other deals with how we identify and arrive at them. The reason why we have suggested going back to the original in Amendment 2 is relatively obvious. First, it is what was agreed at the talks. Secondly, it is what was there when the people of Northern Ireland voted in the referendum to pass the agreement. Therefore, it has the legitimacy of being agreed by the parties at the time—those that participated —in strand 1 at Stormont. Neither Sinn Féin nor the DUP participated, but those parties that did put that proposal to the electorate before anything was operated at Stormont the first time.
I have disagreed with the noble Lord, the former Secretary of State, over his decision in 2006-07 to make changes following the St Andrews agreement, because the changes to the methodology for electing the First Minister and Deputy First Minister were not in the communiqué for St Andrews, but they appeared in the draft legislation immediately after it. The differences appeared at the time to be relatively modest—unless you looked at the minutiae—but they are actually very profound. The reason why we negotiated the arrangements as set out in Amendment 2 is that it was designed to give political, public and constitutional expression to the partnership of the Office of the First Minister and Deputy First Minister.
The regret that I have is that we were perhaps influenced to some extent by what was happening in Scotland at the time, where its devolution was coming together, and the names of the titles of the two officeholders perhaps are misleading. Some people saw them as hierarchical; I do not. I think I am the only person in this Chamber who has held the office. I can tell your Lordships that they are equal, and I will tell you why. In the first week I held the office, with the late Seamus Mallon, we were unable to agree on the notepaper heading for the department. The department was incapable of sending out any correspondence for a week, until such time as we agreed on what the notepaper looked like.
It may seem a trivial matter, but it proves the point. When, in the first Assembly, First and Deputy First Ministers were answering questions, we respectively moved to each other’s Benches on a rotational basis to answer the questions to demonstrate that the posts were equal. The reason they were equal was because we sought, after years of difficulty and disagreement, to give each of the larger sections of our community a hand on the steering wheel.
The noble Lord, Lord Morrow, said that without the changes made at St Andrews, there would be no devolution. That is nonsense. There was devolution before St Andrews and there will be devolution after it. What changed was that the goalposts were moved to the extent that changing from designations within the community—I know there are many Members  who want to change that, and we will obviously have to address that at some point—meant it was the largest party. Therefore, the largest party in the Assembly could be from a minority designation but still have First Minister. That would have been impossible under the arrangements that we negotiated in 1998. It has been used at every election since, as “If you don’t vote for me, you will get Sinn Féin.” It is in the manifestos, in black and white. It is there. That fear is irrational but significant, and not to be underestimated. That is the only shot in the locker that some people have to win elections. “If you don’t vote for me, you get them.” That is the way it is. That is the only leg that some people have to stand on.
The reason why there is a difference in these two amendments, therefore, is that we believe that if you are going to significantly change the rationale behind the institutions, it should be done by going back to the people who negotiated them in the first place. That is basically the rationale for the difference. This is not to be underestimated. I know that the Minister has a genuine case to make, that we have moved into things that have not been part of the original legislation. In fact, in a Statement he made or in a letter that he sent out, I think he described the Bill as “technical”. My goodness me, we are well beyond “technical”, are we not?
What we need to be looking at is that there is a pattern of messing around with agreements and trying to change them on the hoof to deal with the latest crisis, instead of having a rational process to deal with it. I agree to some extent with the noble Lord, Lord Hain, in his point that there is erratic engagement by the Government from time to time. Sometimes, they are engaged and sometimes they are not. Then we get up and arrange backstairs deals here.
Double-jobbing was mentioned by the noble Lord, Lord Morrow. Of course it is nothing to do with New Decade, New Approach; nothing to do, strictly speaking, with the legislation. We all were involved in it. In fact, there is one noble Lord in the room who spoke in Brussels, Westminster and back in Belfast in one day: that is the noble Lord, Lord Kilclooney, who, at that time, had multiple mandates, as many of us have had. That was because it was not clear whether the institutions were going to survive or not and people therefore helped to try to get the thing started, and it was a perfectly legitimate thing to do, but we have strayed quite a bit from the legislation.
I just make those points. I sincerely hope that the Government will look very closely at this, because it has the potential to derail things after May. I can see it all: it is there in black and white. It is no secret that it will be a huge issue, against the background of the pandemic, our young people having lost two years of their schooling, and the huge rise in the cost of living and inflation. All of these things will be swept aside and we will concentrate on “If you don’t vote for us, you’ll get them.” It is such a waste of time and effort; it is a wasted opportunity to try to make devolution work so that it delivers something different and better than if the legislation and the Administration were coming from here. Otherwise, what is the point of having it?

Lord Bew: My Lords, I sympathise with what the noble Lord, Lord Empey, has said, and with the important words of the noble Baroness, Lady Ritchie. However, the fate of Amendment 4 shows what happens when we try, late in the day, to inject new elements into this piece of rather specific technical legislation. The fate of Amendment 4 rather implies that, however desirable in principle this is—and I accept the point about the effective equality of the First Minister and Deputy First Minister—this is probably not the moment to try to move that ahead.
With respect for what was said by the noble Lord, Lord Morrow, it is forgotten in this House that, but for the DUP and the St Andrews agreement, we would not have had 10 or more years of stability in Northern Ireland. Those of us who do not like aspects of the St Andrews agreement, particularly around this point, must accept that as an important political reality. It is important to bear that in mind. However, as a footnote to what the noble Lord, Lord Morrow, said, the provision dealing with the election of First Minister and Deputy First Minister in the St Andrews agreement is not quite the agreement which the then Labour Government suggested at the time; it is not what was implemented in law.
The reason that I mention this is because I think it is possible—I almost said, looking at the noble Baroness, Lady Ritchie, “Your day will come”, but because of the implications of that phrase in Northern Ireland, I will not—that the day will come, perhaps not too far in the future, when we return to this point. I wanted to check with the Minister that the realities are that, if the Government do decide to return to this point at a later date, there is no forbidding aspect and nothing saying, “You can’t do that because it is in the Good Friday agreement or St Andrews agreement.” The Government would be free to act if this looked to be the only way out of a major crisis of the institutions.

Lord Rogan: My Lords, I will confine my remarks to the amendments under discussion. As I did in Committee, I support the amendment standing in my name and that of my noble friend Lord Empey.
As your Lordships will be fully aware, this amendment would reinstate the original procedure by which First Ministers and Deputy First Ministers are elected to the Northern Ireland Assembly. Requiring MLAs to endorse the post holders was intended to give elected representatives buy-in to the process. It also empowered the First and Deputy First Ministers with the added authority that comes with their endorsement by a cross-community vote. The changes to these arrangements, carved up at St Andrews, were not good for democracy in 2006. As we head towards an Assembly election in three and a half months’ time, they are even less appealing to the people of Northern Ireland in 2022.
As my noble friend Lord Empey has said, in every Stormont election since the St Andrews deal was done, the DUP has sought to scare the Unionist people by claiming that a vote for anyone but them was a vote for Sinn Féin/IRA. My noble friend and I feel that it is time for that to end. Speaking in Committee, the Minister, with his characteristic frankness, said that he had sympathy for the amendment and the  arguments of my noble friend. However, he added that there was not sufficient consensus to return to the old model of election. I would advance the precise same argument against the Government’s foolish attempt to use this Bill as a vehicle to reintroduce double-jobbing when only the DUP regards that as a good idea.
Should our amendment not be accepted today, I would hope that the Minister will commit in his response to keeping what it seeks to achieve high on his “to do” list, so that we can return to the issue after the new Northern Ireland Assembly is elected.

Lord Browne of Belmont: My Lords, I oppose Amendments 1 and 2. The Bill before us is simply designed to legislate for measures agreed under the New Decade, New Approach deal, not to undo previous commitments entered into at St Andrews. To try to go back in time would help only to undermine the fragile peace that presently exists in Northern Ireland.
As a unionist, I believe that the constitutional framework of our union should be strengthened, especially now, when the smooth functioning of the three devolved settlements is increasingly under attack. In specific circumstances, and during uncertain times, with the backdrop of an Irish sea border and threats to political stability in Northern Ireland, it would be foolish to return to what was clearly a failed system, used to appoint the First Minister and Deputy First Minister. Indeed, there was a lot of instability there. I find it difficult to understand the explanations from those noble Lords supporting the amendment. Therefore, I am afraid that I am forced to conclude that their support is based on petty political manoeuvring, which is clearly inappropriate at a time of increasing societal division and instability in Northern Ireland.

Lord Dodds of Duncairn: My Lords, I was not intending to speak on this group of amendments, but I have been provoked into it by some of the things that have been said, not least by some of the revising of history that we have heard. I can fully understand why noble Lords, on listening to this debate, would have some sympathy with some of the views that have been expressed by the noble Baroness, Lady Ritchie, on her amendment. However, it is important to remember that, in the context of the Northern Ireland political scene, it has been a general principle—up to now, anyway—that those matters that are devolved remain devolved for the parties in Northern Ireland to agree, and Westminster should be very slow not to respect that devolved settlement. That should apply, of course, across all the devolved nations and regions, but particularly in Northern Ireland, given the long and tortuous negotiations that took place in St Andrews and in the run-up to the Belfast agreement. Whatever we may think of a particular idea or amendment—whether we think that it is a good idea that sounds plausible—it is really for the host politicians in Northern Ireland to decide whether or not it should fly.
The principle of sufficient consensus was at the heart of the negotiations that took place in the run-up to the Belfast agreement and the St Andrews agreement. The noble Lord, Lord Hain, who has spoken, was a central player in the St Andrews negotiations as Secretary  of State. Indeed, I remember well that he was even kind enough to offer a lift on a rather small plane to the late Dr Paisley and Martin McGuinness and a number of us on the way back from it, or we could not have got back in time to Belfast to see the thing through. It is important, therefore, to respect the views of the parties in Northern Ireland.
I want to sound a note of caution: people talk of this being a great idea and say that we should return to it. These are matters that were in the remit of the New Decade, New Approach negotiations; they took place over a considerably long period of time—far too long, in the view of many of us. But there was no agreement on either of these two amendments. Therefore, to suggest that either now or in the near future this Parliament should suddenly impose its own ideas without having that agreement and sufficient consensus, by which we mean a majority of unionist and nationalist representatives and an overall majority of everybody. Parliament has the right to do that, but I think it would be very unwise. It would be a grave mistake for Ministers to go away with the impression that this is just a minor matter, because it breaches a fundamental principle that has been at the heart of the political process in Northern Ireland.
The noble Baroness, Lady Ritchie, referred to this at the start. She talked about the consensus and how it has always been about consensus. That is why every single major vote bar one—the protocol—is either by cross-community vote or capable of being turned into a cross-community vote through the petitions of concern method. At the heart is cross-community agreement: a majority of unionists, a majority of nationalists and the majority of everybody taken together—all three must be fulfilled for all key decisions. It is very important that noble Lords remind themselves of this, because a lot of talk today has been about going back to the principles of the 1998 agreement. They should remind themselves of that important principle.
I do not want to delay the House, but it is important to put this on record. The noble Lord, Lord Bew, mentioned the period of relative stability that we had in Northern Ireland following the St Andrews agreement; that is true, and I pay tribute to those who were involved in that in the Assembly. But I challenge the idea that it all came about because there was only one issue in the election. I remember the 2016 election. I was director of elections for the DUP, when we had an overwhelming victory at that election. It was about who was going to take their seats in the Executive.
The Ulster Unionists were refusing to commit. We said we would go into that Executive and serve in government, and we were elected on that positive platform. It was not about who was going to be First Minister or not. That was an issue. In previous elections in the United Kingdom, the question of whether Jeremy Corbyn or Boris Johnson was Prime Minister was a key issue for a lot of people, just as it will be at the next election.
It is trite and trivial to say that this was what the elections were about. Of course they were not. The next election will not be about that issue either. It will be about the legacy issues that the noble Lord, Lord Hain,  discussed. This will be a key point, because he is right to point to the unanimous view of the parties and victims in Northern Ireland about the dreadful nature of the proposals that are being brought forward. That will be an issue. The protocol will be an issue. Anyone who thinks that the protocol is not going to be an issue in the next election in Northern Ireland is not living in the real world that my noble friend Lord Morrow referred to.
The issue of the cultural package, the overriding of devolution when it suits on certain occasions, as we have been told, is going to happen soon. With legislation, it is a matter for the Northern Ireland Assembly. Let us not forget this and all the talk about threatening institutions. During the summer, when Sinn Féin threatened to pull down the Executive and the Assembly, unless Westminster legislated over the heads of the devolved Assembly, the Westminster Government caved in to keep the show on the road. So let us have a bit of realism and understanding on this issue.
We heard talk that there has been a lot of messing around. I remember in 2003 when the then Ulster Unionist leader went to the Government and got the elections to the Assembly postponed. The election campaign had actually started for the Northern Ireland Assembly in 2003—people had launched their manifestos. The noble Lord, Lord Empey, will well remember that they went to the then Government and got the election stopped because it was not going to suit their outcome. The DUP still managed to have a victory. If we are talking about messing about, they have all been at it. It is not a one-sided thing where some have been pure and others have been playing fast and loose with the institutions.
The fact of the matter is that this Bill is designed to implement the agreements made in New Decade, New Approach and that is what it should do. On the context for the Bill, it is important to remind people that we are in a very fragile and difficult position, mainly because of issues around the Northern Ireland protocol; unionists rightly feel that the Belfast agreement is not protected, that the east-west relationship has been trashed and that the democratic consent principle, which we will debate later, has been cast aside in the protocol. People, certainly those in the unionist community, rightly feel that their concerns have not been listened to appropriately.
We can debate this today; we are trying to create stability and help it move forward, but if the big issue—the protocol—is not resolved, all this legislation will not serve to keep the institutions afloat, not because people want to see them brought down but because government inaction will mean a one-sided implementation of the agreement. As I said at the start, you need cross-community consensus and support if you are to have stability in the institutions in Northern Ireland.

Lord McCrea of Magherafelt and Cookstown: My Lords, I thought it was interesting that in the previous debate Members from all sides stood up to demand that freedom of speech in this House be paramount. With freedom of speech, even though you may disagree profoundly with a person, you respect their right to be able to say things. I have no doubt that  I may say some things with which some in this House do not agree; nevertheless, I trust that no one would deny me the right to say them.
Thinking about the present debate, I believed that the legislation before the House was based on implementing a matter under the New Decade, New Approach agreement. Members rightly said that there are those who did not agree with that agreement. I certainly did not agree with the Belfast agreement; I did not agree with the destruction of the gallant RUC or the destruction of the UDR, which followed on, or with letting terrorists out to roam across the countryside, in which I reside, where so many people were murdered that it was known as the “killing fields” of the Province. But they were let out under the Belfast agreement. Nothing could be more repugnant to a democracy than to see terrorists roaming around the countryside, snooting their noses and mocking and laughing at families, like my own and many others, whose loved ones were murdered brutally.
I stood on Sunday at the roadside where eight men were brutally murdered and six others—not soldiers, but ordinary workers returning home from their work at an Army base—were injured. We stood there on the roadside, as we have done for the past 30 years, through rain, hail, snow and blizzard—whatever was thrown at us—to honour the memory of those persons who were done to death.
I do not take richly lectures from people about the election—“If you don’t vote for us, you will get someone else.” I was reared in the west of the Province. No one did that more—they were actually masters of it—than the Ulster Unionists. At every election, the candidate standing for that party did so on the 12 July platform to say, “Vote for me.” Of course, they were quite often not seen after that, but nevertheless they did it. It was clearly an orange and green election. To try to lecture this House and some Members of it about that is rather rich. Other Members who know nothing about Northern Ireland—who perhaps have never been there—would think, listening to this, that what the noble Lord, Lord Empey, was saying is right, not knowing the history of what has gone on down the years.
Of course, the noble Lord is right to talk about messing around with legislation, but let us remember that legislation on abortion was brought before this House. It was tagged on to legislation that had nothing to do with it yet it was forced on the people of Northern Ireland even though the issue was supposed to be a devolved matter. I therefore say to this House that we need to be careful in what we say or when we try to suggest what others are suggesting.
I listened to the noble Baroness, Lady Ritchie. She gave the impression that, under the Belfast agreement and the former arrangement, everything was sweetness and light. Yet the truth of the matter is this: in reality, it was a stop-start situation. You did not know when it was up; you did not know when it was down. You found out in the end that it was usually down whenever Sinn Féin said that it had to come down.
I also listened to the noble Lord, Lord Hain. Of course, he has gone back to his customary “Beat the DUP” as regards the threats of the DUP, but let me just remind him that, in actual fact, it was not the DUP that  brought the Assembly down for three years. It was Sinn Féin and people he knows very well. I did not necessarily hear on those occasions the same ferocity as is now being mentioned with regard to the Democratic Unionist Party. We want devolution. We want to see our Province properly—

Lord Hain: I am grateful to the noble Lord for allowing this brief intervention. I did not beat the DUP. I pointed out something that I thought was wrong about Sinn Féin and the DUP unilaterally breaching the consensus agreement. I have never beaten the DUP; I agreed with it that Ian Paisley Senior became First Minister and negotiated with you all. It is not about beating anybody.

Lord McCrea of Magherafelt and Cookstown: I have to say, this is not the noble Lord’s first occasion but, on previous occasions when he intervened in other debates that I have sat in, once again it was anti- DUP propaganda that was being put out. It was not against Sinn Féin.
As far as the three years are concerned, it seemed that Sinn Féin had to be placated and whatever it asked for had to be done. It gave us three lines in the sand, remember: same-sex marriage, abortion, and the proposed culture and Irish language Bill. I ask Members of this House to tell us this: which of those three things have the Government not done or indicated they are about to do? Yet everything that unionism has asked for has been refused and rejected. I am sad to say that, recently, under the Brexit agreement, we found the border down the Irish Sea and the protocol. We are—indeed, every unionist in the country is— demanding that that protocol be removed, yet we find that, in actual fact, it is not to be removed.
The principle of consent is at the heart of this. I suggest to the House that the proposals that are mentioned in the amendments in the names of the noble Baroness, Lady Ritchie, and the noble Lords, Lord Empey and Lord Rogan, do not have the support of, nor command support across, the community.

Baroness Smith of Basildon: My Lords, we have had perhaps a lengthier and more wide-reaching debate than originally anticipated on these amendments, which we also discussed in Committee. That serves to indicate just how much these issues hang together in people’s minds and concerns, as well as how deep some of these issues go. As the Minister will know from his discussions with me outside this Chamber, it goes back to the point about how, when Westminster deals with issues relating to Northern Ireland, there must be a lot of engagement and discussion to reach agreement. That can be difficult, as we have heard today.
When we discussed this before in Committee—I think I referred to this then—the noble Lord, Lord Rogan, said how so many people have made compromises in order to make progress. My extension to that was that, too often, if you are seeking perfection, you stall progress. As I have said before, I have nothing but admiration for those who were able and willing to  compromise, often making a great sacrifice—given that these things are not easy and that passions and feelings run deep—in order to make progress. That is reiterated in the amendments before us today.
When the Minister spoke on this in Committee, he was quite sympathetic in many ways, but he said that there has not been sufficient consensus in the past and that he did not see any at this time, but that that did not prevent future discussion of these issues. I think that is the case. He was very clear, as was the Secretary of State in the other place, that, as I think the noble Lord, Lord Dodds, said, it is a very narrowly defined Bill to deal with a specific number of issues that is not intended to go beyond the New Decade, New Approach document.
Even the noble Lord, Lord Hannan, agreed with the noble Baroness, Lady Ritchie. That may be a first, and possibly a last, but we look forward to perhaps more agreement between the two of them on those issues. That was not a criticism; it was a welcome observation.
I am interested to hear what the Minister has to say on this issue, because in terms of where Northern Ireland goes from here, it is quite clear from listening to the debate today that the situation is fragile. The Minister has a task ahead of him to ensure that he keeps open channels and that we can move things forward, rather than going back to a more difficult position, which nobody wants to see. The situation is fragile, and it requires the Minister to take a lead, engage in discussions and accept the different points of view that have been expressed here today. I thought the noble Baroness, Lady Ritchie, made a powerful case from her point of view, as did the noble Lord, Lord Empey, but the point has been made that this goes beyond what was envisaged. It would be helpful if the Minister could say something about how he sees engagement on these issues in the future.

Lord Caine: My Lords, I am grateful to everybody who has spoken in this debate. If the noble Baroness, Lady Smith of Basildon, said one thing that is incontestable, it is that this has been a very wide-ranging debate indeed. Following the comments of my noble friend Lord Empey, I might try to do something which seems increasingly unfashionable in the House these days, which is to stick to the Standing Orders and confine my comments to the amendments before the House, and not repeat at length arguments and debates that have taken place in Committee and on Second Reading.
The issues covered in the amendments before us were debated at length in Committee on 13 December. As I made clear at the time, I am not without a great deal of sympathy for the amendments of the noble Baroness, Lady Ritchie of Downpatrick, and my noble friend Lord Empey. Indeed, I am on record over a number of years as saying that I prefer the 1998 model of appointing the First and Deputy First Ministers, which was subsequently changed at St Andrews. I do not for one second doubt the sincere motives of the noble Lord, Lord Hain, in seeking the agreement which he achieved in 2006 and implemented in 2006-07, but my personal preference is always for the parallel consent model of 1998.
As a number of noble Lords have said, a cardinal principle of the political process and the implementation of agreements in Northern Ireland since the mid-1990s has been the sufficient consensus rule. My noble friend Lord Dodds of Duncairn made that point very powerfully, as did my noble friend Lord Bew. The sufficient consensus rule means that any significant changes to or departures from those agreements require the support of parties representing majorities of unionism and majorities of nationalism. Indeed, that is how we got the Belfast agreement in the first place.
As some noble Lords have mentioned, this Bill is about implementing New Decade, New Approach. I was involved in a lot of the discussions between 2017, following the collapse of the institutions after the resignation of Martin McGuinness, and July 2019. In fact, to digress for just a second, I was very grateful to the noble Lord, Lord Hain, for his kind words absolving me of any responsibility for the actions of a number of Conservative Secretaries of State. He then made the exception of Julian Smith—who, of course, was the only one I did not work for, but I take his comments in the spirit in which I hope they were intended.
As I said, this is about New Decade, New Approach. During the discussions that formed the basis of that document, a number of these issues were raised. There was not sufficient consensus, and they did not appear in the final document.
I say to the noble Baroness, Lady Suttie, that none of this is to say that the Government have a closed mind to change in future. The Belfast agreement has not stayed set in stone over the years: there were changes at St Andrews and at Stormont House. Indeed, I was interested to hear my noble friend Lord Hannan say that one of the reasons he was opposed to the Belfast agreement was the lack of opposition. Actually, in the Stormont House agreement—the fresh start agreement—and subsequently in New Decade, New Approach, there are provisions to facilitate the functioning of a proper opposition within the Assembly. So, things do not always remain static. We are open to change so long as those changes are consistent with the underlying and enduring principles of the Belfast agreement, which have to be based around inclusive power-sharing government.
In asking the noble Baroness to withdraw her amendment and my noble friend Lord Empey not to move his, I will give a clear commitment from the Dispatch Box: these issues are not going to go away, and after the election, whatever the outcome might be, I and the Government are very happy to have discussions with the political parties to test the appetite for any further reforms along the lines suggested in this afternoon’s debate. In that spirit, I ask the noble Baroness, Lady Ritchie, to withdraw her amendment.

Baroness Ritchie of Downpatrick: My Lords, I thank all noble Lords who have contributed to this rather omnibus, wide-ranging debate. It has referred to the contents of the amendments, and to matters of a very raw political nature that are outwith the responsibilities of this technical Bill, which nevertheless has great political implications for all of Northern Ireland.
In this wide-ranging debate we have had those who support the amendments and those who do not, but I would like to think that all of us in this House want to see peace, stability and reconciliation, and proper partnership government in Northern Ireland that delivers for all the people on education, health and the economy.
Various contentious issues were mentioned in this debate, such as the protocol, which we will come to later. Noble Lords also mentioned the past and legacy issues, which very much need to be resolved. We also mentioned cultural and Irish language issues. I am a Gaeilgeoir; I did Irish at school and attended the Irish college in Donegal in two separate summers, because my mother wanted me to. But I believe in that element of diversity, and I believe in respect for political difference, ethnic difference and racial difference. I would like to see that right across the community.
Therefore, I am pleased that the Minister has indicated he is not without sympathy for these amendments and that the Government intend to come back, post election, and have discussions with the parties in the Northern Ireland Assembly to further explore the appetite for these issues. But I offer a note of warning. Because the political situation is particularly fragile—as referred to by the noble Lord, Lord Hain, and others—my fear is that we may not have those political institutions in a way that is enduring, or capable of delivering for people in Northern Ireland in a post-election sense. That is because of all the turmoil, not necessarily but mostly around the protocol, and other political issues that have sought to threaten those very institutions.
It is very important that we do not walk away from these issues. In view of the Minister’s commitments at this stage, I beg leave to withdraw the amendment but point out that I will return to these issues. I hope that in those negotiations, although they relate to strand 1, the Irish Government—as the other co-guarantor of the agreement—are involved as well.
Amendment 1 withdrawn.
Amendment 2 not moved.

Amendment 3

Lord Caine: Moved by Lord Caine
3: After Clause 3, insert the following new Clause—“Transitional provision(1) The amendments made by sections 1(2), (3) and (5) and 2(2) do not apply in a case where section 16A of the Northern Ireland Act 1998 applies as the result of an Assembly being elected before this Act comes into force.(2) The new provisions relating to vacancies in the office of First Minister or deputy First Minister—(a) apply in relation to vacancies arising within the period of seven days ending when this Act comes into force, but(b) do not otherwise apply in relation to vacancies arising before this Act comes into force.(3) For these purposes “the new provisions relating to vacancies in the office of First Minister or deputy First Minister” means—(a) the amendment made by section 1(4),(b) the new section 18(A1)(c) to be inserted into the Northern Ireland Act 1998 by section 2(3), and  (c) the new paragraph 3D(A1)(c) to be inserted into Schedule 4A to that Act by section 2(5).(4) The amendments made by section 3 do not apply where the duty of the Secretary of State under section 32(1) or (3) of the Northern Ireland Act 1998 arises before this Act comes into force.”Member’s explanatory statementThis new Clause makes transitional provision in connection with the provisions of the Bill about executive formation.

Lord Caine: My Lords, I hope that this group of amendments can be dealt with very briefly. Two of them are in my name and deal with the commencement clauses in the Bill.
At Second Reading and in Committee, I committed to going away and considering the strength of argument put forward by a number of noble Lords in regard to bringing forward the commencement date for the provisions in this legislation. As drafted, the provisions would come in two months after Royal Assent. Both here and in the other place, the Government have been clear that we would consider early commencement if the political situation in Northern Ireland were to warrant it. In debate on the previous group of amendments, a number of noble Lords referred to the delicate situation in which we currently find ourselves. In our judgment, the situation therefore warrants early commencement, which is why I have tabled an amendment to that effect.
As such, if the government amendment is accepted, the provisions in the Bill will come into effect on the day of Royal Assent. To ensure that there is no ambiguity over when the provisions of this legislation come into effect, should there be a First Minister or deputy First Minister resignation, thus triggering the seven-day executive formation period, and the legislation receives Royal Assent during that seven-day period, the provisions in this legislation will also apply. I hope noble Lords will agree that these amendments demonstrate that the Government have listened to the strength of argument put forward, in particular by the noble Baroness, Lady Suttie, and others, and will accept them.
At Second Reading and in Committee we also committed, in response to the noble Lord, Lord Coaker, who I am pleased to see here today, to considering what more the Government could do to promote and explain the commitments in, and implementation of, the New Decade, New Approach agreement. We had a lengthy exchange in Committee when the noble Lord did exactly what I would have done in his place, which was to trawl through the annexes of the document and pick out some of the more obscure commitments to try to catch me out. I think I had a fairly long list of commitments that had been implemented. I do not intend to read them out at this stage, on Report. If anybody who was not in Committee is interested, they are all in Hansard.
With this in mind, I am committing the Government to laying a Written Ministerial Statement every six months, setting out what commitments they have delivered on to date. I assure the House that the first Written Ministerial Statement to that effect will be forthcoming within the next few weeks. I hope that the undertaking  I am giving today will satisfy the noble Lord, Lord Coaker, and that on that basis he will feel able not to move his amendment. I beg to move Amendment 3.

Lord Coaker: We strongly welcome Amendments 3 and 9 in this group, which are about the early commencement of the Bill, as the Minister explained. We fully support them and are pleased that the Government have come forward with them.
I thank the Minister as well for the commitment he has given in the Chamber to coming forward with a report every six months about the implementation of the New Decade, New Approach agreement. If the House will forgive me—some noble Lords were not present in Committee and may not have had the opportunity to read the debate—the purpose of Amendment 6 was to get a report from the Government. The Minister has conceded on and agreed to do that, which is welcome, particularly regarding the first report in a few weeks’ time, which I think all noble Lords will find very helpful. In New Decade, New Approach there are serious constitutional issues that have been discussed today and will be discussed in the future. But alongside that, in the document there was a huge list of commitments made by both the British and Irish Governments to improving the situation in Northern Ireland, whether that be on infrastructure or, as it was at the time, the nurses’ pay dispute. It was all of those things.
I was simply trying to say that these are some of the things that people in Northern Ireland, as those who seek to and do represent them would point out, are very serious matters. The list was tucked away in the annexes to the document and, without being raised by me and other noble Lords, would simply have passed by. But as a result of raising it in Committee, and the Government responding, we now have a report where people will be able to see—I will use the example given by the noble Lord, Lord Dodds—whether the York Street interchange is progressing. That is a serious matter, as all of us who have been to Northern Ireland know, but there are all sorts of concrete examples of various commitments made by the Government, so it is important.
The only thing I would add, because I spoke at length about the commitments that the British Government made, is that it might be worth putting on the record again that the Minister said that there was £2 billion-worth of government money committed to this, of which £600 million has so far been spent. So the people of Northern Ireland can look forward to a further £1.4 billion as being appropriate to the implementation of this deal, and that is really important.
I add that of course it was not just the British Government who made commitments. I will not read them all out because I was not trying to catch the Minister out. I was simply pointing out the commitments that have been made and negotiated to deliver for the people of Northern Ireland, which I thought was a really important point to make. Also within it, of course, are the commitments made by the Irish Government. There is a list of things that the Irish Government have said they are going to do to promote and deal with issues in Northern Ireland. Again, the report that the Minister has now agreed to publish will no doubt depend upon not only the various negotiations  and discussions that the British Government have but those which the Northern Ireland Assembly has. A huge list of issues—again, I will not read them out—have been laid out there.
As I say, we support the legislative change that the Government have made with respect to the commencement of the Bill in Amendments 3 and 9. I say to noble Lords, however, that Amendment 6 on the laying of the report sounds very simple. It seems an amendment of no great consequence. It actually deals with the spending of billions of pounds of money in Northern Ireland on projects that will make a huge difference to the lives of ordinary people. It would show that the British and Irish Governments are delivering for the people of Northern Ireland but also that the Northern Ireland Assembly is doing so, as indeed the people who represent it do in this place or the other place, or indeed in Stormont. At a time when there is constitutional challenge and difficulty, it is also worth pointing out some of the positive things that legislators and Governments do to try to benefit the people of Northern Ireland.

Baroness Suttie: My Lords, I am also extremely grateful to the Minister for making this concession on Amendment 9, following the amendment I tabled in Committee. I am also grateful that he has committed to giving a regular report on the implementation of the New Decade, New Approach agreement.
As the Minister knows, my honourable friend Stephen Farry MP tabled the same amendment in the House of Commons, and I am extremely grateful that the Minister has been prepared to listen to the arguments and employ common sense. This is perhaps something that could be usefully repeated by many of his ministerial colleagues in this House. I believe it demonstrates this Chamber’s usefulness in asking questions, and in revising and improving legislation. In the current political climate, waiting two months for the Bill to come into force would have risked leaving a political vacuum at this critical time. Allowing the Bill to be enacted at Royal Assent provides a greater level of stability and a political safety net. I am very grateful to the Minister.

Lord Lexden: Having warmly supported the noble Lord, Lord Coaker, at Committee stage, I welcome the fact that we are to have regular six-monthly reports on the commitments which the British Government gave in the New Decade, New Approach document. It is very important that this House is made fully aware of what our Government here at Westminster is doing, working closely with the devolved Executive and Assembly, to secure progress in Northern Ireland. These six-monthly statements will bring home to us the extent to which the British Government are, we hope, working successfully.
As for the Irish Republic, I would welcome—and I am sure the House would welcome—news of developments which assist both sides of the border in social and economic co-operation. That is what we all welcome. But I hope that nothing will be forthcoming that intrudes on British sovereignty over Northern Ireland; that matters above all. So I welcome very much the six-monthly reports—and I hope they will the subject of debate in this House from time to  time—to show how progress is being made in Northern Ireland with the assistance of our Government in co-operation with the Executive and the Assembly.

Baroness Ritchie of Downpatrick: My Lords, I support what the Minister said, particularly in relation to the commencement date being fixed in legislation. I also support my noble friend Lord Coaker in relation to the reports on the New Decade, New Approach implementation period.
I am conscious of the devolution settlement, but I am also conscious of the fact that the Northern Ireland Executive had commitments to deliver with respect to the New Decade, New Approach. As part of that statement, would it be possible to provide a few columns about the progress of these commitments? The Minister and I are only too aware of the delays in responses to the areas of the common frameworks that were devolved from the European Union to the UK and the devolved regions in the post-Brexit scenario. Nothing happened in terms of Northern Ireland during the three-year interregnum, so we need to know, in an expeditious way, how the Northern Ireland Executive are implementing their commitments, notwithstanding the need to protect the devolution settlement. If there could be a section in the Minister’s statement to that effect, I would greatly appreciate it.

Lord Dodds of Duncairn: My Lords, I too thank the noble Lord, Lord Coaker, for tabling this amendment in Committee, and I think we had a very useful debate there about the Government’s commitments under NDNA—because there were many. I also thank the Minister for his commitment to a regular written statement and I share the view of the noble Lord, Lord Lexden, that hopefully we can have a debate on those issues from time to time. I also have no issue with the earlier commencement date, as tabled by the Minister in Amendment 9.
On Amendment 3, I want to ask the Minister, since this is a new amendment, to clarify its intention. It is very technical and complicated; it is to do with the transitional arrangements if things were to happen before Royal Assent of the Bill. I would like to be clear, so that the Minister has it on the record, what exactly this clause will do. It talks about events happening
“within the period of seven days ending when this Act comes into force”.
But, if we do not know exactly when the Act is coming into force, things could happen that are caught, but there is no idea at the time that they would be caught, because suddenly Royal Assent happens. It is a very vague formulation. I wonder why it is there and what it is intended to capture—as opposed to saying, for instance, that the Act will apply after a certain date. I would be grateful if the Minister could clarify, in winding up, the import of the clause.

Lord Caine: My Lords, I am grateful to noble Lords for the responses they have made to these amendments. I assure the noble Lord, Lord Coaker, the noble Baroness, Lady Ritchie, and my noble friend Lord Lexden, that it is my intention to make these reports as comprehensive as possible while, as the  noble Baroness, Lady Ritchie of Downpatrick, mentioned, respecting the boundaries of devolution. I will take away her comments, and those of my noble friend and the noble Lord, Lord Coaker, to try to ensure that the reports are as far reaching and detailed possible. I also reassure my noble friend Lord Lexden, with whom I go back many years, that I am totally committed to recognising and upholding the sovereignty of the United Kingdom Government, and of this House, with respect to Northern Ireland. It is part of the United Kingdom, and he knows well that this is a situation that I wish will endure for ever.

Lord Empey: I welcome the amendment of the noble Lord, Lord Coaker. In his capacity of spokesperson on the union, can the Minister give us an assurance that he will be able to give us similar six-monthly reports and debates on what is happening in Scotland and Wales?

Lord Caine: I am grateful to the noble Lord for his intervention. I think that is a matter that I will have to raise with my noble friends in the Scottish Office and the Welsh Office.
The noble Lord, Lord Dodds of Duncairn, mentioned the transitional arrangements. If I can put it as plainly as possible, under the current rules, if either the First Minister or Deputy First Minister were to resign, there would be a seven-day period by which there would have to be a renomination before an election was triggered. If that were to happen up to seven days before Royal Assent was given, it would apply retrospectively once Royal Assent had been given, and the provisions of this Bill would kick in.
Amendment 3 agreed.
Amendment 4 not moved.

  
Clause 5: Petitions of concern

Amendment 5

Baroness Hoey: Moved by Baroness Hoey
5: Clause 5, page 7, line 42, at end insert—“(9) This section has effect notwithstanding section 7A of the European Union (Withdrawal) Act 2018.(10) No inference is to be drawn from subsection (9) as to whether this section would otherwise have effect subject to section 7A of the European Union (Withdrawal) Act 2018.””Member’s explanatory statementThis amendment would ensure that section 7A of the 2018 Act cannot transport the requirements within the Protocol into domestic law, and thus nullify the cross community consent mechanisms.

Baroness Hoey: My Lords, I beg to move Amendment 5 and will speak to Amendment 7, both of which are in my name and that of the noble Lord, Lord Dodds. In Committee, the name of the noble Lord, Lord Trimble, was also on this. Unfortunately, through a communications error, his name did not appear. He could not be here today, but he wanted me to say clearly at the beginning that he wishes that his name was on it and he supports it fully.
I believe that this amendment goes to the heart of everything that we have been talking about today and, indeed, everything that we talk about in Northern Ireland and in relation to it at the moment: the word “consent”. I have been making a note of every time that consent has been mentioned in this debate, and it is well into double figures, even in this short time.
I will talk about how the Government changed the consent principle in Northern Ireland last year, by inserting a provision, in paragraph 18(5) of Schedule 6A, into the Northern Ireland Act 1998 to expressly disallow the requirements for cross-community consent when it comes to the key vote in the future on the Northern Ireland protocol, if it is still there. Quite simply, this demolishes a core plank of the Belfast agreement and so causes many people to wonder what purpose is actually served by a cross-community protection for key decisions, as set out in paragraph 5(d) of strand one of the Belfast agreement. The consent principle was one of the reasons that men and women in Northern Ireland supported the Belfast agreement in the end, despite their concerns about many aspects of it, like prisoner release, which has been mentioned already. They went in and voted, many of them with a heavy heart, because they thought that it was best for Northern Ireland at the time. As a pro-union community, they had a safeguard to stop something that was harmful in the future to their community.
So the Belfast agreement has been unbalanced with this government move. Even the Government’s own barristers, in the High Court proceedings that I am part of in Belfast, accepted that this subjugated the Acts of Union. As I said in Committee, how can any noble Lord in this House stand over that approach? In their Command Paper, the Government themselves have conceded that the protocol has no consent from the unionist community and identified this as a core problem.
So, in these amendments, we seek to undo that injustice. Amendment 7 seeks to repeal Schedule 6A to, and Section 56A of, the 1998 Act and would undo the Government’s unilateral move to disapply community consent. Amendment 5 ensures that the 2018 Act provisions cannot, by implication or otherwise, subjugate the cross-community consent protections, which are so vital to peace and stability in Northern Ireland.
Of course, the move to disapply cross-community consent conflicts even with the protocol itself, which contains an express requirement to protect the Belfast agreement “in all its parts”. This is further replicated in domestic law in Section 10(1)(a) of the European Union (Withdrawal) Act 2018, whereby there is a requirement to
“act in a way that is compatible with the terms of the Northern Ireland Act 1998”.
The Government’s approach to apparently acting compatibly with the 1998 Act and protecting the Belfast agreement “in all its parts” was to unilaterally, without the consent of a single unionist elected representative at any political level, disapply one of the key provisions of the agreement and of the 1998 Act. I am sure that many Members of your Lordships’ House did not realise that this was happening. There was never a vote on any of this in our Parliament.
When faced with this issue, the Government’s response was that the protocol consent vote is not devolved. I will make three observations on this. Paragraph 5(d) of strand one of the Belfast agreement and Section 42(1) are directed, respectively, to “key decisions” of the Assembly and
“a matter which is to be voted on by the Assembly”.
There is no constraint on the provision only being applicable to devolved matters. Secondly, if the provision had, in any event, no force or effect, why was it disapplied? Thirdly, in any event, the protocol consent matter is devolved. The 1998 Act lists matters that are excepted or reserved, and any that are not listed are therefore devolved. In paragraph 3 of Schedule 2 to the 1998 Act, “International relations” is listed as an excepted matter. However, paragraph 3(c) of Schedule 2 makes clear that this does not include
“observing and implementing international obligations”.
In undertaking the vote derived from Article 18 of the protocol, the Assembly is implementing and observing an international obligation. Therefore, it is devolved.
The Belfast agreement is essential for protecting peace and stability in Northern Ireland. Protecting that agreement must mean protecting its provisions for the betterment of all citizens in Northern Ireland, rather than simply viewing the agreement through what effectively amounts to a principle of nationalist interpretation. It cannot be the case that cross-community protections are for one community, when it suits, but not the other. Either the Belfast agreement serves the entire community equally or it has no point, from a pro-union perspective. So these amendments are fundamentally about restoring the careful balance negotiated by the noble Lord, Lord Trimble, and others in 1998.
I am for ever genuinely astounded by those who shout loudest, as guardians of the Belfast agreement, if they do not really mean it. They seem to demand that the Belfast agreement be construed in a manner conducive to certain objectives by certain communities. So we hear nothing from the SDLP, Sinn Féin or even the Alliance Party on the heinous move to trash cross-community consent protections at the very time that it seems to be working to the benefit of those who have overwhelmingly rejected the protocol.
Over many months, the record will show that many of us have warned the Government and raised the alarm on this issue. If the Belfast agreement is to continue, the fundamental balance must be restored. Otherwise, even those within unionism who supported the agreement could not conceivably recommend continuing in a process that is fundamentally imbalanced and to the detriment of the pro-union community and, indeed, the union as a whole of Great Britain and Northern Ireland—the United Kingdom.
We met with the shadow Ministers and, obviously, the government Ministers on this, and the former showed some genuine understanding of this and an acceptance of how it was causing real problems in Northern Ireland. I also know that the noble Lord, Lord Caine, was given very little time in Committee when this was proposed, because it came in quite late, and I am hopeful that he will be able to give us a little more of his real views on it today, having, I hope, gone back and talked to people in government.
I do not need to say much on the second amendment because its objective is clear: it seeks again to undo the damage done to the Belfast agreement by the unilateral move to disapply cross-community consent. It is restoring cross-community protections on the protocol vote to ensure that, if there is to be a protocol applying in Northern Ireland, it will require cross-community consent. Without that, it cannot survive. It fixes these amendments and the Government’s error—I will put it no stronger than that—in inserting these provisions into the Northern Ireland Act without the consent of a single unionist elected representative at any level in Northern Ireland.
As I and many of us have said many times before, ultimately, the Government will have to choose between the protocol and the Belfast agreement. That is something I do not want our Government to have to do. But the reality of the situation in Northern Ireland, as has been said by many Members in this House, is very serious indeed, and there is very little time to get this sorted. It is not going to go away.
I am pleased there is a statement on the BBC because it probably means there are a few more people here than are normally here when we have debates on Northern Ireland. I appeal to noble Lords who may not have looked into this in great detail to think about this carefully, because this is crucial if we are serious about moving forward in Northern Ireland. If we cannot get this right and we break the Belfast agreement in this deliberate way, I am afraid that its long-term future is at risk.
I hope noble Lords will understand what may seem very technical but is actually very simple: do we mean what we said in the Belfast agreement and the Northern Ireland Act 1998? I beg to move.

Lord Bew: I have great respect for the gritty texture of the speech of the noble Baroness, Lady Hoey—initially, what is important to understand is why we have got to this point. She is absolutely right; there is a major problem with the one-sided, nationalist appropriation of the Belfast agreement and the willingness, on the whole—if you read Michel Barnier’s memoir on the EU, for example—to accept that version. Getting it back to a balance—and in this respect I absolutely agree with the noble Baroness—is the clue to stability in Northern Ireland. That balance has departed.
The reality is that in 2017 the May Government lost an election they were not expecting to lose, and the UK negotiating position on these points collapsed in the autumn. Anybody who looks at it closely can see that Irish officials in recent times have published how amazed they were; one Irish official at the centre of these negotiations writes about how easily they were accepted as the only guardian of the Belfast agreement. That being the case, noble Lords will not be surprised that the version of the agreement that starts to play into the 2018 protocol in particular is one-sided. On 6 November, the noble Lord, Lord Murphy of Torfaen, said in this House that he considered that the negotiators of the 2018 withdrawal agreement for the May Government had failed to take into proper account the complexity and commitments of the Good Friday agreement across the board. To that extent, the underlying emotion impelling the noble Baroness, Lady Hoey, today is entirely correct.
However, we are in the process of trying to correct this now, and it is inevitably an imperfect process. What should have happened—it must have been obvious to any child looking at the current negotiation trying to work out how the protocol is to work out—is that we should have said to the Irish Government and the EU: “We will protect the single market, now tell us what you will do to make sure the trading arrangements for Northern Ireland are flexible.” We did not do that. It is so elementary it makes one cry looking at it. We are now desperately trying to reclaim ground that we lost in that negotiation. The trouble is that that ground is lost. When this Government came in, the first letter from the Prime Minister to the EU said we were trying to restore the delicate balance of the Good Friday agreement, which indicated that he recognised the problem—as the noble Lord, Lord Murphy, recognised the problem—and that there was work to be done.
At this point, the agreement with the EU came. The one key difference between the 2018 and 2019 agreements of the Johnson Government is the reference to assent for the Northern Ireland Assembly. It is absolutely clear that the terms of that agreement are not accepted by many unionists. In the earlier version, there were a lot of people in Northern Ireland without democratic rights. It is far better for the people of Northern Ireland across the board that their say at key points, and on how this protocol is implemented, is democratically inscribed.
There is a question mark about this and whether it is compatible with the agreement of 1998 and broader agreements. The noble Baroness, Lady Hoey, mentioned the Act of Union 1800. Article 6 of the Act of Union—I have no idea why the Government’s lawyers said it was subjugated by recent developments—is subjugated by the Government of Ireland Act 1920, which says that trade is the responsibility of this Parliament, as far as Northern Ireland is concerned. That is essentially what the 1998 Act and subsequent legislation, which took over the Government of Ireland Act, say. There is nothing obscure, oblique or implied—it is absolutely explicit in the Government of Ireland Act. That is a very weak argument.
It is important to understand this: the Act of Union is about trying to create one nation across two islands, one community of sentiment, and it failed. What we then did in 1920, perfectly reasonably, was say there are two nations on one island, in Ireland. This reflects the formation of two different Parliaments. But there is no point in any of us now wistfully talking about the Act of Union 1800. It failed. I have written an elegy on it. The circumstances are determined essentially by the legislation of 1921 up to 1998.
The crucial thing is that the UK Government then attempted to reclaim some ground, in the context of being well behind in terms of the already massive concessions made in, for example, the joint report with the EU of December 2017. It did reclaim this bit of ground, and a role for the Northern Ireland Assembly is there; it is important for its functioning and will last several years. It corrected the great insult to the people of Northern Ireland. Frankly, the rights of the people are more important than the rights of one particular  community or another, or even cross-community consent, but they had no rights whatever under the 2018 agreement and just had to suck it up.
Something was done, but it is imperfect. We now have an ongoing negotiation to attempt to correct the other problems, which are, essentially, the current trading relationships between Great Britain and Northern Ireland and the hindrances to that negotiation. This should have happened a long time ago, but we are now doing it from a weaker position.
It is in the EU’s interest to guarantee stability in Northern Ireland and help the functioning of the Good Friday agreement. And it is in the Irish Government’s interest, so we must hope that these negotiations succeed. They can no longer carry on paying mere lip service to implementing the Good Friday agreement in all its aspects—something the noble Baroness, Lady Hoey, quite rightly refers to as being a phrase that is used more casually than practically. Throughout the protocol, there is a commitment to introducing the Good Friday agreement in all its aspects. There is an international agreement there, which, as has been said by law officers in this House, has in a sense a prior existence and status commanding the later agreements, especially given that the later agreements give a commitment to implementing it in all its aspects.
There is a real debate here, particularly about strand 3 and the failure of the current arrangements to reflect the model of strand 3 of harmonious development. How can there be harmonious development when so many British firms no longer feel, between east and west, it is worth their while to import into Northern Ireland? It is obviously an insult to the basic point of strand 3.
Here is my point of dissent from the amendment of the noble Baroness, Lady Hoey. When we negotiate a concession and are seeking further concessions from the weak position of what was negotiated in the 2018 withdrawal agreement, we cannot suddenly turn around to the EU and say: “We agreed the exact terms with you on which the Northern Ireland Assembly would have a say on the protocol. Now that we have thought about it, we do not like these terms, and a lot of unionists are very unhappy with them.”
It is impossible at the moment; there is a struggle going on to try and get the EU to respect the Good Friday agreement in all its parts and to realise that this is not just a document of significance or emotional importance to the nationalists but contains very important safeguards. There is a struggle to try to get the EU to accept that under the international treaty it is the United Kingdom Government who have responsibility for the economy of Northern Ireland—which currently they are supporting to the extent of £15 billion a year —as well as responsibility to deliver parity of esteem to both communities. At the moment, the ways things are, there is no parity of esteem because no unionist politician supports the protocol.
There is a labour here and an obligation on the United Kingdom in these negotiations to get this right—from really a weak negotiating position. I urge the noble Baroness, Lady Hoey, not to push this amendment. The last thing in the world that would do any good at this point in this difficult negotiation is for us to say: “By the way, the last concession you gave us,  we are tearing up.” We cannot possibly do it. Our duty now is to try to convey to the EU what implementing all aspects of the Good Friday agreement actually means and how this requires a balanced outcome that both communities in Northern Ireland can live with.

Baroness Ritchie of Downpatrick: My Lords, it is a pleasure to follow the noble Lord, Lord Bew, and I am only sorry that when I took politics at Queen’s he was not a lecturer then; he came in several years later. His speech was very interesting and I think we are all much better informed because of it.
It will be no surprise to Members of your Lordships’ House that I support the protocol. I say that rather advisedly because it is a matter of contention in Northern Ireland. We must remember that the protocol arose out of Brexit and that is the fundamental issue. The people of Northern Ireland, including me, voted to reject Brexit and they wanted to remain in the European Union, but history is history, and we have to respect particular outcomes.
Therefore, in this context, it is vital that we see a successful outcome to the current negotiations between the UK and the EU. We want to see a successful outcome covering such important issues for the people in Northern Ireland as the SPS veterinary agreements, medicines, customs issues and the democratic deficit. The UK Government published a Command Paper back in July. I did not agree with the content. The European Union then produced a series of non-papers—as they are characterised—in October. Both sets of papers naturally form the basis for the ongoing negotiations.
Quite honestly, I think that it is preferable at this stage to allow the negotiations to take their course. Can the Minister advise us on what stage they are at? The Minister and I, along with the noble Lords, Lord Empey and Lord Dodds, were at a meeting yesterday with the Minister for Europe, Chris Heaton-Harris, who sits in the other place. He could not necessarily give a timetable for the completion of the negotiations, but it is vital that they are dealt with in an expeditious manner and provide solutions for all the people in Northern Ireland, including the business community and wider society.
I am a supporter of the protocol, but I want to see those—let us call them—mitigations whereby the people of Northern Ireland are able to trade within the UK internal market and the EU single market and we are all able to realise the opportunities. We have already seen those benefits so it is important that they are documented and emphasised in terms of new businesses and new opportunities for investment. They are there.
Those in the business community do not want to be saddled with the politics of this issue. They want to see business opportunities opening up in this post-Covid situation and the whole community in Northern Ireland prospering. It is much better that we await the outcome of these negotiations, which I feel should be dealt with in a very expeditious manner. Many people have been talking about instability. It is those who were perhaps involved in actions of instability who are creating the instability.
It is important that we refrain from such language and try to go back to encouraging both participants in the negotiations to complete them as quickly as possible,  covering all those areas, so that outcomes are achieved that bring an improvement for all the people of Northern Ireland.

Lord Mackay of Clashfern: My Lords, Northern Ireland has been a matter that I have thought of as very difficult in this situation for quite a long time. I believe that the explanations that have just been given by the two speakers who went before me are vital in trying to get a settlement that will be sufficiently good for all the interests in Northern Ireland. If we are going to do that, it will be by a pretty full solution to a difficult problem.
In my view, there are no reasons just now to create more difficulty than we have to deal with. Therefore, I am very much in favour of what has been said in regard to the law about this and particularly the negotiations situation, which we need to solve. Negotiation is the only way in which we will get this right, and I hope and pray that the negotiations will be entirely successful and that the people of Northern Ireland will get a bargain that will work for them from now on.

Lord Dodds of Duncairn: My Lords, it is a pleasure to follow the noble and learned Lord. I share his wish for a successful outcome to the negotiations that addresses the fundamental problems that are part of the Northern Ireland protocol. However, I fear that time is very short now and there is little willingness, from what I can see, on the part of the EU to address the fundamental points. It has put forward various mitigations but none of them addresses the governance issue which we are talking about today, none of them addresses the democratic deficit, and none of them addresses the fact that part of this United Kingdom in the 21st century will have laws made for it by a foreign institution, in its interests, over which no elected representation of that part of the United Kingdom has any vote or say. That is an outrageous position.
We have to address this point. The points that have been set out in the amendment proposed by the noble Baroness, Lady Hoey, have gone to the heart of trying to address this matter by saying that we have a problem. I accept what the noble Lord, Lord Bew, said, that the most recent agreement had in it something that Theresa May’s agreement did not, which really was a role for the Assembly. He is right and reminds us that when people now tell us that Theresa May’s deal was a great deal for unionism and we should have accepted it, that was not the case. It did not have any democratic legitimacy, it created a regulatory border down the Irish Sea and it would have put Northern Ireland completely inside the customs union. A lot of revisionism goes on over these matters.
The problem is that although the agreement gives a role to the Assembly, it does not give it any democratic say. The issue of the democratic deficit cannot go away. You cannot have citizens of this part of the fifth-biggest economy of the world having laws made for them that separate us from the rest of the UK—and will separate us more and more over the years to come—and create differences, not just small regulatory ones but massive differences, to our economy when we have to align with the European Union while England, Scotland and Wales go down a different path.
Remember that we in Northern Ireland do more trade with the rest of the United Kingdom than the rest of the world and the EU put together, never mind the constitutional issues. In the meeting the other day with Chris Heaton-Harris, referred to by the noble Baroness, Lady Ritchie, he reported that every business he talks to reports a problem with the Northern Ireland protocol. Yes, some businesses that export to the EU might find it convenient, but the vast majority of our trade is with the rest of the UK. Not least, some of those businesses that export to the EU take many of the inputs to their manufacturing process and so on from Great Britain. Some 20% of all checks on goods from across the world into the EU are carried out in Northern Ireland, between one part of the UK and the other. Remember that that is in a situation where we are in a grace period and 90% of the protocol has not actually been implemented yet.
This situation cannot endure. It must be resolved. One suggestion that we have looked at, and this is the purpose behind the amendment, is to say, “For this vote that’s going to happen in the Northern Ireland Assembly in 2024, let’s restore the voting mechanism under the Belfast agreement whereby it’s a cross-community vote.” As I said, this is the only significant key vote that is given to the Northern Ireland Assembly that is incapable of being a cross-community vote. It is a majority vote. For 99 years of Northern Ireland’s existence we were told that majoritarianism and majority rule was unacceptable, but the Northern Ireland protocol it the one area where the UK Government changed the Belfast agreement through an SI—not even primary legislation, but a piece of delegated legislation in Committee one day a couple of years ago. The purpose of the SI was to change the Northern Ireland Act.
People tell us that the Belfast agreement and the Northern Ireland Act are sacrosanct and cannot be changed. Indeed, the Northern Ireland protocol itself says it is designed to protect the Belfast agreement “in all its parts”. I would have thought that included the cross-community mechanisms and supporting the Northern Ireland Assembly. As we have said in previous debates, that is at the heart of the Belfast agreement, as amended by the St Andrews agreement and all the rest. It is also in the Belfast agreement itself: paragraph 5(d) of strand 1 says that all key decisions should be under the cross-community consent mechanism.
It really is important that this matter is addressed. It goes to the heart of one of the problems that bedevil the stability of the institutions. As the noble Lord, Lord Bew, referred to, massive damage has been done to strand 3 of the agreement regarding the east-west relationship between Northern Ireland and the rest of the UK, but massive damage has also been done to strand 1 through the working of the Assembly because it has been interfered with. I will not go into the arguments about whether this is a devolved matter because the noble Baroness, Lady Hoey, set them out very clearly, but if you give a decision to the Northern Ireland Assembly then it should be given on the basis of the Belfast agreement as amended. That is the basis on which the Assembly has operated since 1998 but it was unilaterally changed for this particular issue.
We have to restore that important principle of cross-community support. It is the Northern Ireland protocol and its outworking that is causing the instability in Northern Ireland. That is the inevitable result of the trade barriers, the friction and the fact that in many instances citizens in Northern Ireland cannot order goods on the internet from the rest of the UK any more. Costs are being racked up by businesses. The UK Government are spending hundreds of millions of pounds a year, which could go into investment, productivity and boosting the economy, on administrative officials under the trade support mechanisms to basically administer all the customs checks on behalf of businesses. That is an amazing dereliction of the responsibilities of the UK Government to the citizens of Northern Ireland.
I plead with noble Lords to restore the proper role of the Northern Ireland Assembly in this matter. The Government clearly now have three choices when it comes to the protocol. They are imminent choices, matters that have to be decided within a very short period. Either they will reach agreement, as we said earlier, although it is doubtful that that will happen, or they will take action on their own part, either alongside or apart from the instigation of Article 16 of the protocol—or, if neither of those happens, the resulting instability in the institutions will lead to their demise. Those are the only three options now open. I sincerely hope that the Government do not allow the third one to happen. This mechanism would provide a democratic route, in line with the Belfast agreement, to give people a political way forward and restore some kind of route map for people in Northern Ireland, whether they agree with the protocol or not, to have a vote on a cross-community basis.

Baroness Suttie: My Lords, in response to the very measured intervention from the noble Lord, Lord Bew, I have two points. The first is that the Bill is about implementing some of the remaining elements of New Decade, New Approach, so we do not believe that it is the right place to make the changes set out in the amendments by the noble Baroness, Lady Hoey. Secondly, as the noble Lord said so powerfully, given that discussions are ongoing between the Government and the European Commission, the amendments would be deeply unhelpful to making progress at this time. For those two reasons, we strongly oppose the amendments.

Lord Hannan of Kingsclere: My Lords, I have not heard anyone really deny the central point made by the noble Baroness, Lady Hoey. I have heard some brilliant and enlightening speeches but even that gorgeous threnody of the noble Lord, Lord Bew, for past agreements, his great melody against it, did not defy the central point that cross-community consent was supposed to be the basis for every major decision. The pact that we made with the communities of Northern Ireland was that important constitutional issues of this kind would not be decided by simple majoritarianism but would require the consent of both communities. As the noble Lord, Lord Dodds, says, that was the basis on which the whole previous dispensation was overturned, so we cannot in conscience arbitrarily withhold that principle on this one issue. I will therefore support the noble Baroness’s amendment.

Lord Empey: My Lords, once again my noble friend the Minister is suffering from mission creep as far as the Bill is concerned, but I think he will have to concede that we are past the post on that and we are where we are.
The genesis of this issue is obviously our decision to leave the EU. I do not want to reopen that debate; we spent years in this House arguing the toss. However, before the vote I and my colleagues—many of whom are actually not Europhiles at all; many are very hostile to the EU’s federalist tendencies and all the rest of it—visited Prime Minister Cameron before the vote specifically to find out what his plans were in the event that the UK decided to leave the EU. It was a fairly elementary thing to do. We came away from that meeting clear in our own minds that our own Government had not worked out how our situation was going to be dealt with in future negotiations with the EU. That made us feel very uneasy.
What we are talking about tonight, and have been talking about for the past few years, is closing the stable door after the horse has bolted. As the noble Lord, Lord Bew, eloquently pointed out, we are fighting from a much-weakened position. The negotiations pertaining to the European Union started off disastrously. First, we agreed how much money we were going to pay it before we knew what the deal was. Then we put Northern Ireland matters on the table and separated them from trade. They should never have been separated from trade. It was a disaster and, unfortunately, you could see it coming. It is not any surprise. All of these problems—virtually without exception—were anticipated. That is the tragedy of it: it was avoidable and Brexit, as far as Northern Ireland was concerned, was not thought through in sufficient detail. We knew it was going to be difficult, and that was compounded by poor negotiating strategy and implementation.
Our little Province is now left with this mess that we now have. What we have here, and what the protocol currently is, is the product of a proposal from our own Prime Minister. He wrote his explanatory note to the European Union on 2 October 2019, and he proposed the border in the Irish Sea. He proposed border inspection posts; he proposed that the European Union rules would be followed; he proposed that all goods coming from Great Britain would have to be notified to the authorities before they could enter Northern Ireland so that they could be subject to inspection on EU rules. He also included a section on consent whereby the Assembly and the Executive would have to give their ongoing consent. However, he made the point that there must an ability to exit them: that is what he said in the note to the European Union. Of course, you cannot exit them if you are not in them, so the implication is that you are in them before you can get out of them.
This was our own Government’s proposal. As to the point made by the noble Baroness, that would have implied that even though the document accepted a border in the Irish Sea and all the other downstream consequences, it at least accepted that there was a road for the Northern Ireland Assembly and Executive. The one tricky point about that was that, at the time this note was written, there was no Northern Ireland Assembly  or Executive to give their consent to anything, because they were out of business. It was a flawed process right the way through.
I point out to my noble friend Lord Hannan on cross-community consent: if you take that through to all decisions, Northern Ireland, as a unit, would not have left the European Union because there would not have been cross-community consent. We have to be very careful where we draw the lines here.
I do not understand—and probably to my dying day I will never understand—why some Democratic Unionist colleagues here, on the day that this was announced, endorsed it. Arlene Foster backed it as
“a serious and sensible way forward”.
They were perfectly entitled to argue that consent paragraphs were in it, but why would you even contemplate, as a unionist, a border in the Irish Sea, border inspection posts, people having to notify from Great Britain before they send a box of goods to Northern Ireland? Consent or no consent, I just do not understand it.
Anyway, it has moved on from that, so what we have to do is look for an alternative; and there is an alternative. The alternative is the Belfast agreement. We can build institutions around that, using the agreement. We are at the table; the Assembly would be at the table; the Irish Government would be at the table. They can police, from the point of view of the European Union, agreed arrangements; we can police, with devolution from here, arrangements to ensure that the UK internal single market is operating properly. We can have a new North/South body; we can use the institutions to end—or at least minimise—the democratic deficit. Nothing, of course, is going to take away from the fact that, if you have an international treaty with the European Union, where Northern Ireland is, to all intents and purposes, an EU protectorate, that union will still make our laws for large areas of our economy. That is the fundamental weakness in our position.
However, as the noble Lord, Lord Bew, rightly said, as someone who was involved in the negotiations—I am not alone in this Chamber tonight—cross-community assent was the fundamental building block, because that ensured that both communities had their hands on the steering wheel, which was the selling point of the agreement. The noble Baroness is right in that regard. We will support anything that will help move away and give people an extra chance to give their consent to these arrangements. The people of Northern Ireland have never given their consent to these arrangements.
When we look at the history of it, it was all predictable and it was all predicted. We now have to move to the position of finding solutions. I am convinced that there are solutions. Indeed, if I am not mistaken, I have one ally in my belief: the leader of the Democratic Unionist Party. On 19 September 2019, when asked on the BBC’s “Good Morning Ulster”, Jeffrey Donaldson said:
“If new arrangements are proposed to deal with the consequences of Brexit for cross-border trade, then obviously the Assembly is going to be part of that.”
Those new arrangements, he said, could involve the North/South Ministerial Council.
There we have it. We have a starting point and a departure point to solve, or at least minimise, these problems. The noble Baroness has rightly drawn the House’s attention to the severe weaknesses in the arrangements. As there is not any unionist consent—not a scintilla of unionist consent—for these arrangements, this imbalance cannot be allowed to persist.

Lord Morrow: My Lords, I want to be very brief, but I am slightly confused after listening to the noble Lord, Lord Empey. He is not being absolutely clear here in some of his comments. He quotes the former leader of the DUP saying, in relation to the protocol, that they would have to work with it now. I want to be very clear with this House, and it would be appreciated if others who are speaking will also do the same. Arlene Foster at that time made the statement on the clear understanding that the Northern Ireland Assembly, on its cross-community voting system, would have the say at the end of the day.
Having listened to the noble Lord, Lord Empey, and others, I see that it is undoubtedly a very technical issue. I commend my noble friend Lord Dodds, and the noble Baroness, Lady Hoey, on their excellent speeches. I also commend the speech of the noble Lord, Lord Bew. I do not entirely agree with him, but I can see where he is coming from and what he is driving at. Let it be said that there are some of us in this House—my colleague to my left hand and my colleague to my right hand—who were not here at the particular time that the Brexit debate was going on.
I distinctly remember the long nights, into the early hours of the morning, and I remember it continually being said, not least from the Conservative Benches, that we do not want to be just law-takers and have no say whatever in how the law is being made. That is the situation in which Northern Ireland finds itself. Is the noble Lord, Lord Empey, telling us today that he agrees—or disagrees; I am not sure what he is saying and I do not want to misquote him—on the difficulties and consequences of the protocol, that it has to go, and that any vote in the Northern Ireland Assembly must be by cross-community voting and consent? It was Arlene Foster’s understanding at that time that that is the way it would be. So let us be fair to everybody here and not misquote them. I am not interested too much in what the banner headlines of certain papers said or did not say at that time. I would rather stick with the facts, which are very clear.
Northern Ireland now has no say whatever and no vote whatever, and Europe just imposes everything. I am amazed at some in this House who seem to think that that is quite all right. Northern Ireland was not asked to vote on Europe on its own; we are a part of the United Kingdom, and the United Kingdom left the EU in a democratic vote. Someone explain to me what is wrong with that, please.

Lord McCrea of Magherafelt and Cookstown: My Lords, may I simply say that the cross-community safeguards at the heart of the devolved settlement have been trashed by the protocol? The wilful and reckless decision by the Secretary of State unilaterally to remove the cross-community voting protections  contained in Section 42 of the 1998 Act has damaged public confidence. Whether noble Lords want to believe it or not, they had better realise that, if the protocol continues, the Northern Ireland Assembly is on life support. Do not rub the nose of Unionists in the ground.

Baroness Smith of Basildon: My Lords, when this amendment was first tabled at short notice in Committee by the noble Baroness, Lady Hoey, and the noble Lord, Lord Dodds, as I know it had to be, I have to say that I struggled to understand how it was in scope, and I still feel that it is slightly outwith the Bill. Having said that, I am really pleased that we have had this debate, which has been extremely powerful. I also thank the noble Baroness, Lady Hoey, and the noble Lord, Lord Dodds, for taking the time to speak to me and my noble friend Lord Coaker about their concerns on this issue.
As I say, it has been a very powerful debate and I hope the Minister understands the strength of feeling around the House. I always felt that the situation was tough on Northern Ireland. During the debate on Brexit, when the Prime Minister had his “£350 million a week for the NHS”, I do not recall many people paying attention to what the situation would be in Northern Ireland. Northern Ireland can rightly feel aggrieved that its interests did not seem to be very high on anyone’s agenda, a point made by the noble Lord, Lord Empey.
I am particularly grateful to the noble Lord, Lord Bew, for the points he made and for the extremely thoughtful way in which he addressed some of the issues. I do not support the amendment being in the Bill—that is quite a difficult stretch to make—but the Government have to listen to what has been said here. I made a similar comment earlier on the amendment proposed by the noble Baroness, Lady Ritchie. The scope of this Bill is around the New Decade, New Approach issues. The Bill’s approach is very narrow; it is looking for agreement in areas where there is cross-party agreement, which we have been discussing. The amendment goes outside that.
However, I find it absolutely extraordinary that, when the Government were debating and discussing Brexit with the EU, nobody from Northern Ireland was in the room as part of those discussions. I saw the noble Lord, Lord Frost, wander in earlier, but he left before this debate, which is a great shame, given that he is the architect of the protocol; it would have been useful had he remained and perhaps given us some explanation of how we reached this point. I have to say that the Government have let Northern Ireland down in the handling of the protocol, which was debated, discussed and agreed by this Government. Unless those with a stake in the economy and business of Northern Ireland are directly engaged in those discussions and negotiations, it will be very difficult to reach an agreement and conclusion that can satisfy and benefit Northern Ireland. The noble and learned Lord, Lord Mackay, made a very important point in his brief contribution when he talked about the way forward for negotiations and to find an agreement. If the people of Northern Ireland are not included in those negotiations, that will be extremely hard to do.
Many of us recall—I am sure noble Lords from Northern Ireland recall—the film of the Prime Minister speaking to a business group in Northern Ireland and saying, “There’ll be no checks, no borders, no tariffs and no forms to fill in. If you get a form, send it to me—give them my home number and I’ll deal with it.” They were the Prime Minister’s rules, as my noble friend Lord Hain said, and we know that the Prime Minister does not always know what is in his own rules—that has been established already today. But on something of this importance, it is extraordinary that the Government were so careless with Northern Ireland. So I understand the depth of feeling on this issue, and I am grateful to the noble Baroness and the noble Lord for allowing this debate today, even though it seems to be outwith the Bill.
There are further negotiations to come and they must focus on the talks, but the Government have to be on notice on this if they do not include Northern Ireland in those negotiations. Why not have one of the meetings in Northern Ireland? Go to Northern Ireland and talk to businesses and to people who live with this, day in, day out, and there might be a better conclusion. That process has to run its course, which is why we cannot support the amendment. But let no one be under any illusion that we do not understand the problems that this Government have caused.
There is an ongoing court case, as has been mentioned, and a number of issues have to be addressed. I look forward to the Minister’s response, but I have to say to him: get a grip, because this cannot continue in this way. It has direct implications for political stability in Northern Ireland. The noble Lord, Lord Empey, made the point—my noble friend Lord Hain made a slightly different one—that it was the UK’s decision to leave the EU. When the constituent parts of the UK were looked at, Northern Ireland was one of the areas that voted against leaving the EU, yet it is facing some of the harshest consequences of that decision, which is unfair. I hope the Minister can say today that this issue will be looked at seriously and Northern Ireland will be involved in the decision-making process. It may not be a matter for the Bill today, but it is certainly not going to go away.

Lord Caine: My Lords, my noble friend Lord Empey referred to “mission creep”, and the noble Baroness, Lady Smith of Basildon, referred to the scope of the Bill. I confess that when I started the Bill in your Lordships’ House, little did I suspect that I would probably spend more time discussing the Northern Ireland protocol, which does not form part of the Bill, than any of the provisions that do form part of it. So I congratulate the noble Baroness, Lady Hoey, and my noble friend Lord Dodds of Duncairn on their ingenuity in bringing this matter before the House through this amendment. Of course, following the comments of the noble Baroness, Lady Smith of Basildon, I completely understand the strength of feeling in Northern Ireland on aspects of the protocol. Indeed, before I assumed my role on the Front Bench, I think I gave expression to some of them myself. I completely understand the sincerity with which the noble Baroness and my noble friend have brought their case today.
In one area, I will slightly disappoint the noble Baroness, Lady Hoey. When she brought this to the Committee, I referred to the fact that a number of the issues she raised on the compatibility of the protocol with the Belfast agreement and the Act of Union, on which the noble Lord, Lord Bew, made some interesting and pertinent comments, are currently the subject of a court case. These arguments are being considered by the Court of Appeal in Belfast so I am to some extent limited in what I can say. We expect the judgment shortly; I cannot put a date on it, obviously, but we await the outcome of that case with huge interest.
This somewhat circumscribes what I am permitted to say, albeit the crux of the Government’s argument is that the consent mechanism contained in the unilateral declaration, which is directly referenced in Article 18 of the Northern Ireland protocol, is compatible with the Belfast agreement and the voting mechanisms in the Assembly because they deal with the United Kingdom’s relationship with the European Union, which is definitely an excepted matter. Therefore, the cross-community mechanisms in the Assembly, which are designed to be put in place for matters that are wholly devolved in Northern Ireland, do not apply in this case. That has always been the crux of the Government’s case but, as I say, this case is currently before the courts. I hope we will get their judgment shortly.
I will say a few words about the current state of play. As I said before, I acknowledge the widespread concerns about the protocol’s construction and implementation. It has led to divergence of trade and increased burdens on business, and has disadvantaged consumers. As we saw before Easter, it has also led to certain societal problems and contributed to political instability in Northern Ireland. Of course, those who made the case for the protocol at the outset did so on the basis that it was essential to uphold political stability in Northern Ireland and help to maintain the Belfast agreement in all its parts. The danger and unintended consequence of the way the protocol has been implemented is that it risks undermining political stability and community confidence in the Belfast/Good Friday agreement. The Government recognise that and the inherent dangers very clearly.
Let me give a couple of examples. My noble  friends Lord Dodds of Duncairn, Lord Empey and Lord Hannan, the noble Baroness, Lady Ritchie of Downpatrick, and I served together on the Protocol on Ireland/Northern Ireland Sub-Committee of the European Affairs Committee. Every week, we took evidence from expert witnesses who pointed out some of the disadvantage that they faced. For example, we now have some 200 companies in Great Britain that no longer trade with Northern Ireland. Garden centres cannot get many plants; indeed, I think I have colleagues on these Benches who have historically supplied Northern Ireland with horticultural produce but are now having a great deal of trouble. There are even examples of Northern Ireland’s Jewish community struggling to access kosher food.
So the impact of the protocol has been felt across the board in Northern Ireland and represents a risk in its present form, construction and implementation to confidence across the community in the Belfast/Good Friday agreement. To that end, as has been referred to in a number of speeches this evening, the Foreign Secretary and the Northern Ireland Secretary, my right honourable friend Brandon Lewis, met the EU Vice-President, Maroš Šefčovič, last week. We are now entering a period of intensive negotiations to try to find a solution. I think that the Foreign Secretary will meet Vice-President Šefčovič again on 24 January to assess progress.
All along, the Government’s position has been that we wish to remedy the defects in the protocol by agreement and through negotiation and discussion, as was set out in the Command Paper last summer. However, in the event of there being no agreement, we will not rule out unilateral action if that is deemed necessary, but the clear preference of the Government is to address these matters through negotiation and agreement. Judging by the read-outs I have had from the meetings that took place last week, that is also the clear preference of the EU.
It strikes me that there are four reasons why I would ask the House to reject the amendments put forward by the noble Baroness, Lady Hoey, and my noble friend Lord Dodds at this stage. One is the court case to which I just referred. The second is that the amendments deal with matters that are not part of the Bill’s main focus: the implementation of the New Decade, New Approach agreement, to which the noble Baroness from the Liberal Democrats referred. Essentially, the Bill is about New Decade, New Approach, the document that led to the reestablishment of the devolved Government in Northern Ireland after an absence of some three years between 2017 and 2020.
I just want to pick up the point made by the noble Baroness, Lady Smith of Basildon, about engagement. The Assembly and the Executive were in abeyance for much of the period after the referendum, which included our triggering Article 50 and leaving the EU. It was very unfortunate, to say the least, that that was the case.

Baroness Smith of Basildon: I accept that point. It was a huge detriment to Northern Ireland that the Assembly was not meeting at that time. However, there were still businesses and elected representatives. It would have been so helpful if the Government had just been a bit more thoughtful about Northern Ireland during those negotiations.

Lord Caine: I appreciate the noble Baroness’s sentiments. To give one example, I recall that, in the aftermath of the referendum, the then First Minister, Arlene Foster, and the then Deputy First Minister, Martin McGuinness, wrote a letter to the then Prime Minister setting out the Northern Ireland Executive’s priorities for the negotiations. Of course, shortly thereafter, for reasons that we are all too familiar with, the Assembly and the Executive went into abeyance for three years, but I take the point. I was there for a good deal of that period, and there was a lot of engagement going on, but we lacked the formal mechanism of the Executive.
On engagement, my understanding is that the Minister for Europe is due to be in Northern Ireland tomorrow to meet a number of business organisations and individual businesses. He has held meetings with Members of your Lordships’ House in the past few days. This morning, along with the Secretary of State for Northern Ireland and the Europe Minister, I attended a regular meeting with the First and Deputy First Ministers of Northern Ireland; that will be an ongoing process. We recognise the need for strong engagement on these matters.
I want to go back to the reasons for urging the noble Baroness to withdraw the amendment. The noble Baroness, Lady Ritchie, and my noble and learned friend Lord Mackay of Clashfern, in a very wise contribution, emphasised the ongoing nature of the discussions and the fact that we need to try to give those discussions breathing space to reach a successful conclusion.

Baroness Ritchie of Downpatrick: I thank the Minister for taking my intervention. In his wind-up, will he give us his estimation, following discussions today, of a date for the implementation of these negotiations or for their conclusion? They are absolutely vital because we do not want to see them impinge—although many believe that they will—on the election itself.

Lord Caine: The noble Baroness, Lady Ritchie of Downpatrick, attended the meeting with the Minister for Europe yesterday at which I was present. I think that issue was raised then, and he was unable to put an absolute timeframe on this. If he cannot do so, I do not think I can answer that question directly from the Dispatch Box other than to say that the Government are seized of the urgency of this matter and the need to come to a resolution as expeditiously as possible. I take on board what the noble Baroness said and the comments in this respect from a number of Members from Northern Ireland behind me from the Democratic Unionist Party and the Ulster Unionist Party, and from the noble Lord, Lord Bew.
My final point relates to the nature of the amendments, which effectively would ask Parliament unilaterally to change an existing agreement between the United Kingdom and the European Union as set out in the unilateral declaration, the protocol and the withdrawal agreement. While negotiations are going on with the EU, it would not necessarily be helpful to those negotiations if we were to change an existing international agreement with the EU. That does not strike me as probably the most helpful way forward in negotiations. With those comments, I urge the noble Baroness, Lady Hoey, to consider withdrawing the amendment.

Baroness Hoey: My Lords, I thank everyone for their contributions. This has been a thoughtful and useful debate on a part of the United Kingdom that gets far too little attention at any time other than when there is trouble. I will briefly address a couple of points that were raised.
I get tired of people going on about how the protocol is all about Brexit. Northern Ireland voted as part of the United Kingdom, and we voted as the United   Kingdom to leave. Let us be realistic. What happened then is that Northern Ireland has not left the European Union. We are in the internal market for all sorts of aspects, and we are now seeing that working through in the constitutional issue which is part of this debate tonight: the question of consent.
I thank the noble Lord, Lord Hannan, for his short speech of support. As someone who was a long-time Member of the European Parliament, perhaps he more than anyone here realises, when we say, “We are waiting for these negotiations and so we cannot talk about this, vote on it or do anything now,” just how very unlikely it is that the European Union will cave in and give back what should never have been signed away. I am not interested in who made the bad decisions, who is blaming who in Northern Ireland, or in which Government did it; I am interested now in sorting it. The only way we will do that is to stand up for our country—for a United Kingdom—and not use the excuses that have always been made about why we have a protocol.
When do we get a vote on this? The noble Lord, Lord Caine, talks about the legal action. Will we get a vote after that? I believe that all the other arguments used to explain why there cannot be a vote tonight are just procrastination. The people of Northern Ireland are fed up with this place and the other place not really ever accepting that they are part of the United Kingdom. I wish people would be honest. There are Members in this House who do not want Northern Ireland to be part of the union but they will not say it. Behind the scenes, we in Northern Ireland do not believe that we have the total support of Peers in this House and Members of Parliament in the other House. I believe that we should be voting on this tonight, but I am aware that there are Members here who have said to me that they genuinely do not think that this is part of this Bill—that it should not be in it. I do not agree with them, but I know that they will use that as  their reason—understandably and perhaps genuinely honestly—not to support it.
I want the people of Northern Ireland to know that we have discussed this and that we mean what we say. I will withdraw my opportunity to have a vote, because I know that if this did not pass tonight, that would be used by people to say, “There is no support for getting back cross-community consent”, and I do not believe that is true.
I therefore thank Members who have spoken and—I am not being patronising to noble Lords—I hope that some people tonight have genuinely learned something about what is happening in Northern Ireland at this moment. We can talk about New Decade, New Approach and we can say that this is what the Bill is about. There will not be any New Decade, New Approach discussions or anything coming out of New Decade, New Approach until we sort the protocol out and until Northern Ireland is fully part of the United Kingdom again. That is what this debate is really about. I beg leave to withdraw the amendment.
Amendment 5 withdrawn.
Amendment 6 not moved.

  
Clause 6: Repeal of spent provisions
  

Amendment 7 not moved.

  
Clause 8: Commencement
  

Amendment 8 not moved.

Amendment 9

Lord Caine: Moved by Lord Caine
9: Clause 8, page 8, line 11, leave out from “force” to “the” on line 12 and insert “on”Member’s explanatory statementThis amendment provides that the default position is for the Bill to come into force on the day on which it is passed (rather than two months later).
Amendment 9 agreed.
Amendment 10 not moved.

  
Clause 9: Short Title
  

Amendment 11 not moved.

  
In the Title
  

Amendment 12 not moved.

Subsidy Control Bill
 - Second Reading

Lord Callanan: Moved by Lord Callanan
That the Bill be now read a second time.

Lord Callanan: My Lords, the Subsidy Control Bill creates a new, bespoke, UK-wide subsidy control regime that delivers on our national priorities. This Bill demonstrates the Government’s clear determination to seize the benefits arising from Brexit and design a UK-tailored regime that departs from the previous prescriptive and burdensome EU state-aid system. We have designed a regime that works for the whole of the United Kingdom while at the same time maintaining our reputation as a trusted and respected partner on the world stage. This Bill helps us to honour our international obligations under World Trade Organization rules, under the UK-EU Trade and Co-operation Agreement and other free trade agreements.
The regime that the Government have set out in this Bill will help public authorities to deliver subsidies where they are needed, without facing excessive bureaucracy or lengthy pre-approval processes, as seen under the previous EU system. It allows for greater flexibility and autonomy for public authorities to deliver on local priorities. However, the Government are clear that this freedom does not extend to harmful and  excessively distortive subsidies. We are not in the business of propping up businesses that are unviable or doomed to fail without government support.
It is also important to set out clearly what this Bill is not. It is not about intruding on spending decisions for local authorities or the devolved Administrations, and it will not dictate the policy decisions that this Government make in supporting our strategic priorities, from levelling up to net zero. Public authorities will maintain their spending decisions in relevant areas and will be supported by clear guidance on how to grant subsidies in line with the new regime. We will continue to make the right strategic decisions, to support the people’s priorities.
For the first time, local authorities, public bodies and the devolved Administrations in Scotland, Wales and Northern Ireland will be empowered to decide for themselves if they can issue taxpayer-funded subsidies, by following a set of UK-wide principles. This will provide them with new freedom and flexibility to design subsidies and subsidy schemes which meet local needs, as well as national policy objectives such as reaching net zero. The seven principles that they will need to follow are clear and proportionate and form the basis of our new regime. They set out that subsidies awarded under the new regime must be justifiable on policy grounds. The subsidy must be appropriate, proportionate, and designed to minimise any distortions to competition and investment in the United Kingdom. These principles, along with additional considerations for energy and the environment, will ensure that public authorities design subsidies that bring out the best in our communities while ensuring consistency. The Government are clear that subsidies are there to support and encourage businesses, not to prop them up.
The Government are committed to our international obligations and relationships with our valued trading partners. Therefore, the principles also require a public authority to carry out a balancing test and to proceed only if the benefits of the subsidy outweigh any distortions to international trade, in addition to UK competition and investment. These principles will be underpinned by clear guidance, which will be published ahead of implementation of the regime. This guidance will support public authorities to ensure that subsidies deliver strong benefits and good value for money for the UK taxpayer, and ensure that subsidies are being awarded in a timely and effective way, to give businesses the certainty and confidence that they need. The guidance will also ensure that public authorities fully understand their legal obligations, and make clear which subsidies are permitted and which are prohibited.
We want public authorities to be able to deliver subsidies quickly, easily and without undue burdens. The Government want low-risk subsidies to proceed with minimum bureaucracy and maximum certainty, so we will create streamlined subsidy routes for subsidies that are at low risk of causing market distortions, and that promote UK-wide strategic policy objectives. These routes will make demonstrating compliance even simpler than the baseline method of principle-by-principle assessment. I appreciate that streamlined routes are a novel approach to subsidising and that further explication is required. To aid understanding, we will shortly  publish a policy statement and two draft illustrative routes. Together, they will describe in detail the Government’s thinking in this area and demonstrate exactly how these routes will work.

Lord Forsyth of Drumlean: I know we have had Covid, but I can still ask a question at Second Reading, even though it is unusual. Can my noble friend explain why the guidance and the information that he is describing has not been made available before we got to Second Reading?

Lord Callanan: My noble friend makes a good point. We will be publishing the guidance as soon as it is available. We are still in discussions with the devolved Administrations and others on the exact design of the regime and the possibility of obtaining legislative consent Motions.
The Bill also establishes the UK subsidy advice unit, hosted by the Competition and Markets Authority. The unit will monitor and oversee how the regime is working, as well as conducting a mandatory, non-binding review on public authorities’ assessments for subsidies of particular interest. Subsidies or schemes of interest may be referred to the subsidy advice unit. A subsidy or scheme of particular interest must be referred to the unit, which will then publish a report detailing its decision within 30 working days. This quick process will allow public authorities to act with far greater agility than before, while upholding the highest standards of accountability or transparency. We are clear that this Bill will allow for agile delivery and proportionate scrutiny at the same time.
Although we can expect that public authorities will take their obligations under this regime seriously, we also recognise the need for a direct route to challenge by interested parties, so there will be a meaningful, time-limited process for enforcement, through the competition appeal tribunal. This will ensure that the subsidy recipients have legal certainty once the window for a challenge has passed. A key part of effective enforcement is ensuring that we are as transparent as possible with information on what subsidies have been awarded. My department listened to the concerns expressed in the other place about the operation of the subsidy database. We are editing the database to improve the quality of information that is available publicly. Of course, the database is still relatively new. Officials are actively developing further enhancements over the coming months, in advance of the new regime coming into force.
A UK-wide subsidy control regime is necessary to ensure that subsidies do not unduly distort competition within the UK’s internal market. I repeat, as we have many times before, that we are wholeheartedly committed to ensuring that the new regime works for the whole United Kingdom. That is why the Government have worked closely with the devolved Administrations, including sharing the consultation response document ahead of publication and carefully considering their representations. We have met with DA officials 45 times and Ministers 13 times to talk about the regime, since July 2020, and we will continue to discuss its development with DA counterparts ahead of implementation. We  will work closely with the devolved Administrations, but it is important to reiterate that subsidy control is a matter reserved for this Parliament. Noble Lords will remember the robust debates that we had on this matter during the passage of the UK Internal Market Bill, but I assure them that the devolved Administrations are and will remain responsible for spending decisions on devolved subsidies within any domestic subsidy control system.
As it currently stands, and according to the terms of the Northern Ireland protocol, subsidies for services in Northern Ireland will be within scope of the new domestic regime. It is this Government’s view that it is no longer necessary for Northern Ireland to be subject to the EU state aid regime, which is why we have proposed a change to the Northern Ireland protocol to bring all subsidies within scope of the domestic regime. As noble Lords will be aware, discussions continue at pace with the EU on the Northern Ireland protocol. However, no matter the outcome of these negotiations, the Bill will deliver for the people of Northern Ireland and ensure that there is clarity on which rules to follow.
This new independent subsidy control regime will help ensure that people in all areas of the UK, from Belfast to Bangor, Derby to Dundee, feel the benefits of targeted subsidies in their areas, and that prosperity and opportunity is spread right across the UK. This includes investment in skills, local infrastructure and new technologies, as well as into research and development. We have the opportunity here to facilitate subsidies that support people’s priorities, from tackling regional inequalities, to combating climate change, to increasing R&D and innovation. The common-sense energy and environment principles in Schedule 2 of the Bill support the UK’s net-zero ambitions, as well as contributing to a secure, affordable energy system. Under this regime, public authorities at all levels of government will be empowered to give subsidies to help address regional disadvantages, supporting our levelling-up aims.
Noble Lords will be aware of the delegated powers in the Bill. I assure them that the powers to make regulations are reasonable and necessary. The regime will need to change over time in response to a number of factors, such as exchange rate fluctuations. Where the Bill includes powers to amend primary legislation, these have been drafted to be as narrow as possible. However, we will of course take into account the findings from the Delegated Powers and Regulatory Reform Committee’s report and we will review accordingly.
The illustrative regulations that we will publish before Committee will help to demonstrate to noble Lords how the Government will exercise, with care, the powers contained in the Bill. I am, as usual, very happy to engage and I will very much welcome feedback from all sides of the House on these products in due course.
We are seizing the opportunities of Brexit. The Bill before us today is an important move away from prescriptive state aid rules. Public authorities across all parts of the UK will have the autonomy and flexibility to deliver subsidies that work for their local area. We are returning decision-making to the hands of the decision-makers in local communities up and  down the country. This legislation ensures that our new subsidy system will maintain the competitive, free-market economy central to the UK’s economic success and to our national prosperity. I beg to move.

Baroness Blake of Leeds: My Lords, I start by thanking the Minister for his engagement with our team and the offers of detailed briefings on this important legislation. Such openness is much appreciated. We agree with the need for this legislation and support the introduction of a subsidy control scheme that provides public authorities at all levels and in all parts of the UK with greater flexibility than they enjoyed under the EU state aid rules.
However, while the EU system came with less flexibility than the one that this Bill envisages, action, for example to support key industries, was never impossible. The UK consistently lagged behind comparable EU member states in the amount of subsidy provided, and in most cases the failure to step in and provide support during a firm’s hour of need was a political choice.
When this Bill was in the Commons, we outlined several fundamental concerns with it. It is not, as has been identified, the finished product. Key terms are not properly defined, and a significant amount of the detail will be left to statutory instruments and guidance, with the department acknowledging in its impact assessment that there are “considerable unknowns” attached to the chosen approach. As the Minister has acknowledged, when we come to talk about oversight, although there have been some improvements since the Commons stages to the public subsidy database, we believe still that it fails on the whole area of oversight.
The Government are failing to mandate clear, swift public declarations of subsidies, or proper means for authorities, including the devolved Administrations, to challenge those that may be unfair. This lack of transparency is an area that we will return to at greater length and is, I am sure, an area that my noble friend Lord McNicol will pick up as we debate these matters further. Surely this is a prime area where the Government’s stated intention to make the UK
“a world leader in subsidy transparency”
should be enacted.
We believe that the Bill lacks ambition. This is yet another framework Bill, meaning there is no clear underlying strategy beyond that of boosting flexibility. Despite stating a wish to level up deprived areas across the UK, the new scheme does not target support by allowing subsidies to target areas of economic deprivation; nor does it address the issue of putting fairness and need at the heart of decision-making. It fails to tackle the biggest challenges that we face. The Bill says virtually nothing about transitioning to net zero, and, while it does still feature some additional energy and environmental principles, they are limited in scope and would not, for example, encourage subsidies for things such as green transport projects. This misses the opportunity to enhance environmental protection, boost regional growth or incentivise research and development, all of which were at the centre of decision-making under the previous arrangements.
Better outcomes drove our decision-making when I was an LEP member for Leeds City Region. Collective decision-making, based on strict criteria and collaboration between all relevant local authorities, was the key to our investment strategy. Perhaps the Minister could inform us as to how this collaborative approach will be enhanced under the new arrangements.
This legislation is especially contentious in terms of the devolved Administrations, who, in a number of areas, are not being afforded the same powers as the Secretary of State, and will not have representation, for example, on the Competition and Markets Authority body advising on subsidy matters.
I could predict the comments made by the Minister when I say that the Government will point to dozens of meetings, held at both ministerial and official level; but, as with most of the Brexit process, it seems that Westminster’s definition of “engagement” differs from that adopted by everyone else. On some points, such as whether the DAs can establish streamlined subsidy schemes, there are probably new forms of words that can be agreed, but others raise that nagging feeling that this Government are simply not interested in devolution.
While there is a benefit to be derived from implementing a new regime sooner rather than later, it is not clear why the Bill has to be pushed through according to the department’s chosen timescale. Surely there was a clear public interest in getting its contents right from the start, rather than leaving gaps to be filled in later. Are we at risk, as suggested in the Financial Times, of sacrificing scrutiny on the altar of speed?
We will seek to make a variety of sensible changes to this legislation and hope that colleagues across the House will work with us to ensure that the Bill that eventually returns to the Commons is an improvement on the initial offering.

Lord Purvis of Tweed: My Lords, we on these Benches support a legal system of state aid subsidy support, built on the principles of a sound industrial strategy, where there are identified areas of need and deprivation. The system should be transparent and linked with addressing the structural problems of our economy and the regions within it.
Between 2014 and 2020, the UK as a whole was allocated £4.3 billion a year of structural funds, ERDF funds and ESF funds. The Government’s Budget has stated that we will reach only £1.5 billion a year for the UK shared prosperity funds in 2024-25. Can the Minister say how that shortfall will be met? It is not as if we were renowned for having an expansive subsidy approach. The impact assessment had highlighted the fact that the UK was one of the lowest in expenditure on subsidies within the former 28. The impact assessment used the data from the EU scorecard. In the most recent year, the UK spent £8 billion—0.4% of GDP—compared to France, £16 billion or 0.8% of GDP, and Germany, £49 billion or 1.5% of GDP. Clearly, Germany, spending five times as much as we did, did not consider us a major straitjacket, burdensome and prescriptive, so why were we so low if it was not the fact that it was simply a government policy choice to be so low?
Interestingly, the Government’s impact assessment also said that, for the purposes of us scrutinising the Bill and for the purposes of costing impact, historic data on the volume and value of subsidies awarded in the UK has been used. So the Government, even as they present their Bill to us, are saying that there will not be any change of direction from that anyway. So what is their intention as far as the way forward is concerned? After the Internal Market Act, the Professional Qualifications Bill and now this Bill, we are legislating in limbo, with so many decisions deferred for future regulation and guidance and with a lack of clear information on how it will support structural investment. It simply is not good enough.
It is interesting that five years after the referendum, the Johnson Government are so uncertain what to do with their new powers that they do not even bring forward any schemes that accompany legislation. The noble Lord, Lord Frost, and I seem to have this confusion in common.
The deficiencies of this Bill were rather cruelly exposed within the first three minutes of the Secretary of State’s introduction at Second Reading in the Commons. A rather plaintive intervention by a Conservative Back-Bencher, on behalf of her constituency, which has a tradition in steel manufacturing, asked whether the coal and steel research fund worth €111 million, and from which the UK would have been able to benefit, would be ring-fenced equivalent for state aid support for research on decarbonisation in the UK. No guarantee was forthcoming. That is the essence of the point. The fact that we now have uncertainty and are reliant on the lack of clarity will be a concern for businesses.
The Minister gave us a number of assertions of the benefits of this new scheme, which are not backed up in the Government’s impact assessment. For example, paragraph 468 on the positive impacts for competition that the Minister mentioned, states:
“It is not possible or appropriate to produce a full competition assessment on such a broad policy change—potentially affecting a large number of subsidies and therefore markets.”
So it is not possible to work out the benefits. The Minister also referenced the Government’s impact assessment on trade, paragraph 474 of which states:
“It is not possible or appropriate to produce a full trade assessment”.
Paragraph 478 states:
“As there is still policy detail—yet to be decided—to follow in secondary legislation and guidance it is not possible or appropriate to provide further analysis on the potential trade impacts”.
On monitoring and evaluation, to get away from the approach that the Minister says is harming us so much, paragraph 481 states:
“As the final details of the policy are yet to be decided, or will follow in secondary legislation and guidance, it is not possible or appropriate to provide specific details on the plan for monitoring and evaluation at this stage”.
At what stage will we get this information? Is it the Government’s intention to bring another impact assessment forward, as they have done on market, competition, trade, monitoring and evaluation? These are fundamental for any new schemes.
Finally, Northern Ireland is an area of considerable concern. The Government have indicated, as the Minister said, that it is their intent that no part of this Bill will apply to Northern Ireland, but that is not in the Command Paper. Paragraph 68 of the Command Paper fully anticipates that European Union law will still apply to Northern Ireland. There will still be a situation where there is double jeopardy, where businesses trading in the UK will still have to comply with British-based schemes and EU schemes, especially when businesses are at risk. The Government’s guidance has told them that they should start having two sets of accounts, one for their business operations in Britain and one for their business operations in Northern Ireland. If they trade in Northern Ireland with a parent company in Britain, they will have to comply with both sets of rules. That is not what the Minister indicated.
Liz Truss, in her article in the Telegraph, said that it would no longer be appropriate to have any schemes where Britain would have to notify the European Union for any support for British businesses in Northern Ireland. That is still going to be the case, even if the Government succeed in getting everything they want in the Command Paper.
There are many other concerns of devolution and the fact that the Minister made no reference to agriculture or fisheries at all, which my noble friends will pick up in this debate. If anything is clear, even so far, it is that there are so many holes in this legislation that need to be filled during this scrutiny that we will have a long task ahead of us, especially for our colleagues in Northern Ireland, who will be faced with a continuing system of confusion, lack of clarity and uncertainty—the very things that the Minister promised we were moving away from.

Lord Ravensdale: My Lords, I welcome this Bill, which puts in place a subsidy regime that will deliver for the whole of the UK. The principle of having considerably more flexibility than the old system in what we are able to do opens up a host of opportunities for how subsidies can be used for the benefit of the whole UK.
Building on what the noble Baroness, Lady Blake, said, I will focus my remarks on levelling up. Central to the levelling-up agenda will be investment into disadvantaged regions, for which this Bill will obviously play a key role, so I was somewhat surprised not to find levelling up at the heart of the Bill, or even find anything which really contributes to it.
As an example, I am the co-chair of the Midlands Engine APPG. The Midlands Engine is a pan-regional partnership that focuses on levelling up the Midlands. Home to 11 million people, the Midlands Engine contains some of the most deprived areas in the UK and, unsurprisingly, subsidies will be vital to levelling up the region. This is perhaps best illustrated by some economic indicators.
Within the Midlands Engine, public spending and support lag significantly behind the rest of the UK, contributing to a considerable gross value-added gap, whether in transport spending, economic affairs or  R&D. For example, spending on transport is £289 per head for the east Midlands and £492 per head in the West Midlands, compared to £882 in London. Public sector R&D in the east Midlands is the lowest in  the UK.
These figures also represent a great opportunity for the UK. Data from the Midlands Engine shows that gross value added per capita in the Midlands is almost £24,000, or 91% of the England minus London average. If this gap were closed, it would add an extra £82 billion each year to the UK economy. The Bill could be a key part of closing this gap in the Midlands and the other regions of the UK. What is needed is a clear signal to businesses as to where are the areas in which additional support will be given, to drive investment into disadvantaged regions and level up.
I heard the Minister say that this is a framework Bill, but it will be used by many public authorities and future Administrations, so there should be more definition on how it will help disadvantaged areas. First, there is nothing on assisted areas, as we had previously. Of course, there are a number of issues when attempting to draw a map for which areas would receive preferential treatment, but there are ways of approaching this which would learn lessons from previous schemes. A map is not necessarily required—a list of agreed economic indicators could be an alternative mechanism.
The way the Bill is currently drafted, if a manufacturer is deciding on whether to locate in Scunthorpe or Surrey, or between Dudley and Notting Hill, there is nothing to advantage these former locations. There is a great opportunity for the Government here, at a time when there is much debate about what levelling up actually means, to show that a clear, evidence-based mechanism will be put in place through the Bill to begin delivering for left-behind communities in the UK. Will the Minister expand on how it is intended that investment in disadvantaged areas will be made more attractive to feed into the levelling-up agenda, and why there is nothing on this in the legislation?
Clause18 appears to prohibit relocation of economic activity. I question why this clause exists, as it could be contrary to the levelling-up agenda by preventing productive relocation projects that would benefit disadvantaged regions in the UK. I can see why it may have been included, to prevent gaming the system and internal competition, but I believe that these factors are already adequately controlled by the existing provisions in Schedule 1. Explicitly ruling out relocation appears to be rather a blunt instrument and contrary to the flexible nature of the Bill. Will the Minister say more on this in his summing up and how he sees Clause 18 align with the levelling-up agenda?
Finally, the Bill represents a great opportunity to embed climate and environment considerations into the decision-making of government and public authorities, given that it will be used by hundreds of public bodies. A key part of the success of net zero will be how far we go in a systems view of the problem, embedding climate considerations across all relevant government policy. Through this Bill, net zero considerations could be applied to all subsidies to help meet the principal  strategic goal of the nation and link with levelling up due to the key role that the regions will play in the net zero transition.

Lord Forsyth of Drumlean: My Lords, I apologise if I discombobulated my noble friend by asking a question at Second Reading. I appreciate it is unusual to do that, but it is also unusual to have a Second Reading of a Bill so devoid of detail and without the information being provided. I put a marker down: this is becoming a habit for this Government. I voted for leaving the European Union; I thought it would mean that this Parliament would have more power over our affairs. This kind of behaviour just gives power to the bureaucracy, which is then not accountable to Parliament. That is not why we did it.
Again and again, from the Animal Welfare (Sentience) Bill onwards, we have had legislation which has not been properly thought through. It is particularly striking with this Bill; it has been through the House of Commons, yet when it arrives here we still do not have the basic information to enable us to have a Second Reading debate on what it is about and what its principles are. We are told that that will follow shortly. It is becoming a habit, like Billy Bunter’s postal order—it is in the post, and by the time it arrives you have forgotten what was promised.
I start from a slightly ideological position which may not please some Members opposite; I am suspicious of subsidies, because I believe they distort competition by bailing out unsustainable industries and attempting to pick winners. I think my fly-fishing but very distinguished economist friend Sir Dieter Helm coined the phrase that Governments are poor at picking winners but losers are good at picking Governments. That is important to remember. If we are to have a regime of this kind, it is really important that we know what money is being handed out to whom and for what purpose.
Looking at the Bill, it is great that, as advertised, it promotes “autonomy, transparency and accountability”. It is unusual for me to praise the European Union—having dealt with the principles of additionality and the problems of getting through the bureaucracy, I do think this is an advance—but I find it difficult to understand why the threshold for disclosure is higher than it was for the EU. Why should that be? Unless I have misunderstood, it is £500,000 instead of €500,000. That is a significant difference. People might say that it is just a rounding error—my honourable friend John Penrose made these points in the House of Commons—but, while these subsidies must be reported, you have to wait six months to find them. It is hard to understand how having to wait six months to see them increases accountability or transparency.
The bit I really do not understand, which my noble friend touched on in his introduction and the noble Lord, Lord Purvis, picked up on, is how this works for Northern Ireland. Northern Ireland is part of the United Kingdom, but on my reading of where we are now, any subsidies would be subject to the European Commission’s rules. That is the position and, until such time as the Government have negotiated their  way out of the protocol which they agreed to, it will remain so. I am not clear what happens if you are a British manufacturer of car batteries, to take an example a colleague suggested to me today, and your cars go to Northern Ireland—if there is a subsidy from the Government to you in the UK, how does that work? It is not clear to me. I would be grateful if my noble friend could explain what will happen. The noble Lord, Lord Purvis, talked about having two sets of accounts. How will that be possible?
I see that I am about to run out of time. I know my noble friend is not to blame, but something is going wrong with the machinery of government when we continue to get legislation, which is not thought through and has no proper impact assessments or detail, being rushed through the House of Commons and coming here. Everyone complains about the number of amendments tabled in this House and the time it takes to get legislation through. That is because Bills are arriving in a form which is not suitable for consideration.

Lord Whitty: My Lords, in introducing the Bill, the Minister said that we are getting away from an overburdensome and prescriptive European system. I will comment on that in a minute but, until we get detailed guidance from the Minister, we cannot tell quite how prescriptive and overburdensome this legislation will be. We are being asked to buy this Bill without knowing the form it will take and in particular its impact on the devolved authorities, local authorities and administrative bodies in this country.
When I chaired one of the sub-committees of the European Union Committee, we found that the European Union state aid regime was indeed very centralised and authoritative but, as my noble friend Lady Blake and the noble Lord, Lord Purvis, said, we did not actually put to it many of the propositions that other member states did. Germany and France had more than twice as much state aid as the UK, because the UK system was overcautious and, in many cases, anti-intervention. Ministers in Whitehall were always faced with civil servants telling them, “This will not pass the state aid regime”. In reality, the European system was not disproportionately unfavourable towards British propositions—those propositions were never put, to the detriment of many of the most deprived areas of our country.
The history is not correct, and nor is the future. The devolved Administrations have very serious concerns about this Bill; for example, it is not clear whether they can invent streamlined schemes themselves, whether they can appeal against decisions by the CMA or whether they will have any representation in the whole process. As I understand it, at the moment the Welsh and Scottish Governments are not prepared to put the appropriate legislation through their Parliaments. That is a serious constitutional issue, one which we need to understand a bit more about before finishing the process of the Bill in this House. I leave it to others to demonstrate the serious problems businesses in Northern Ireland may have with double jeopardy in this area. Scotland and Wales have tried to co-operate with the Government on this and other post-Brexit issues, yet  they are not prepared to give the amber light to the Government on this. That is a serious constitutional issue, and this House should consider it.
The Government may well intend to be more flexible, but we do not know yet. I agree with the noble Lord, Lord Forsyth, that, when we have framework Bills of this nature, the Government cannot expect the House simply to nod them through without seeing how they will really be implemented.
I have three other quick questions for the Minister. First, the Government have resisted calls to exclude agriculture, although the CAP used to be excluded from the European regime. There will be very significant differences between the post-CAP regimes in Scotland, Wales, Northern Ireland and England, so will the Government reconsider special rules for agriculture? They have provided some for energy and the environment—they need strengthening but they have provided them—so can they do that for agriculture?
Secondly, how does this operate in relation to local authorities and procurement? Public procurement is one of the areas the old state aid regime used to be concerned about; if my council of Dorset awards a contract to a firm because it is giving special preference to local employment, will it fall foul of this regime? Finally, what does the £500,000 apply to—the value of that contract or the differential between that contract and what could be applied, shall I say, from Wiltshire?

Baroness Humphreys: My Lords, the Subsidy Control Bill, following on from our experience of the internal market Act and of the loss of EU funding after leaving the EU, provides those of us from the devolved nations with another battle. Our battle is, of course, to protect and defend the powers of the Ministers of the devolved Administrations, given to us by this Parliament. Our fellow citizens would expect no less of us. So, what are our concerns about the Bill? I will concentrate on two issues: consultation with the devolved Governments and the powers bestowed on the Secretary of State. I also wish to make a short comment on transparency.
The Bill makes provision about the control of subsidies following the UK’s exit from the EU, and it is a new system, replacing the EU state aid rules. It sets out a new domestic subsidy control regime, which binds all the countries of the UK together. In doing so, the UK Government have, almost unilaterally, produced a Bill that impacts on the devolved Administrations, and they have drafted it in what is becoming their customary fashion. There was little or no consultation with Welsh Ministers before the Bill was introduced to the Commons, although the UK Government consider that policy development on the Bill has involved
“frequent consultation with devolved Governments”.
So what does “frequent consultation” mean? The draft copy of the Bill was shared with the Welsh Minister on 29 June last year—the day before the UK Government laid the draft Bill before Parliament, where it passed its First Reading. This unnecessarily tight timescale has resulted in a distinct lack of any meaningful engagement on its detail and little or no opportunity for devolved government Ministers to  influence its content. Indeed, the Welsh Finance Minister has commented that meetings with the UK Government on the Bill have been
“little more … than opportunities for the UK Government to outline their position and … their intentions moving forward”.
She added:
“when UK Government has provided us with draft documents, the deadlines for our inputs have been too short to provide a reasoned and considered response, or the drafts … have been just so vague and so general as to provide us with minimal insight into the development of the policy.”
It appears that the two Governments have differing definitions of the word “consultation”. The UK Government are missing a trick here. The Welsh Government have vast experience in the distribution of EU subsidies and are calling for a collegiate approach to drafting the new subsidy regime.
The Bill also provides that functions held at EU level are now held by the Secretary of State, the CMA or the CAT. The role of the Secretary of State is far reaching. The Bill empowers them to shape the subsidy regime in future, with little scrutiny from this UK Parliament and with no scrutiny at all available to Welsh Ministers or the Senedd.
A number of regulation powers are bestowed on the Secretary of State that do not require the consent of or consultation with Welsh Ministers, even when the regulations cover devolved issues. The Secretary of State will also have the power to refer subsidy awards or schemes in policy areas of devolved competence to the independent regulator. These new powers alone would undermine the power of Welsh Ministers to act in relation to matters such as economic development, agriculture and fisheries, which are within their devolved competence at present. So, there will be no meaningful consultation and no involvement in the future drafting of subsidy control measures—in essence, this is a complete neutering of Welsh Ministers’ powers.
On transparency, under EU state law, individual subsidies of over €500,000 were published online, as the noble Lord, Lord Forsyth of Drumlean, explained. The Bill increases that threshold to £500,000. This of course means that subsidies of £499,999 will not need to be published. So, because the subsidies are not cumulative, one business can receive repeated subsidies without publishing their details.
The Centre for Public Data recommends that all subsidies over £500 should be published. Why do the Government not agree with this? Perhaps they should seize the benefits of Brexit which the Minister spoke about and provide the UK with a more transparent system than that of the EU.

Baroness Hoey: My Lords, the Explanatory Notes of the Subsidy Control Bill say, in very grand words, that the Bill is to
“implement a domestic subsidy control regime in the United Kingdom that reflects the UK’s strategic interests and particular national circumstances, providing a legal framework within which public authorities make subsidy decisions.”
Here we go again. Under Article 10 of the Northern Ireland protocol, EU state aid rules continue to apply to subsidies related to trade in goods and the single electricity market that affect trade between Northern  Ireland and the EU. The Bill would not apply to subsidies that are subject to Article 10, so why do we even bother saying “the United Kingdom” in the Bill? It is not the United Kingdom.
In their Command Paper, the Government maintained that the provisions of Article 10 are
“redundant in their current form.”
The noble Lord, Lord Frost, said in December 2021 that businesses in Northern Ireland were
“facing unjustified burdens and complexity”
and that the Government could not deliver aid,
“for example for Covid recovery support, without asking for the EU’s permission.”
What kind of Government leave part of the United Kingdom outside the advantages of breaking away from EU state aid rules? What kind of country allows this to happen and has to go cap in hand to beg the EU to be able to give help to its own citizens?
It is very disappointing that, despite what the Minister has said, there is absolutely no confidence that in these negotiations the EU is simply going to roll over and allow us to take back control of our economic situation in Northern Ireland. Northern Ireland will be significantly disadvantaged in goods yet again.
I want to read something from a very big manufacturing company in Northern Ireland which told me how it will affect the company in reality. The company said that in May 2020, Liz Truss, who was then the Secretary of State at the Department for International Trade, announced the most favoured nation tariff regime, the UK global tariff, which replaced the EU common external tariffs. Then, in January 2021, it reduced or removed rest of the world customs duties on thousands of products—compared to those imposed by the EU—that the UK no longer produced, or not in significant quantities. The EU, of course, retains those duties to protect its manufacturing industries from competition. Liz Truss stated:
“It supports the country by making it easier and cheaper for businesses to import goods from overseas … It is a simpler, easier to use and lower tariff regime than the EU’s … CET … It will scrap red tape and other unnecessary barriers to trade, reduce cost pressures and increase choice for consumers … It backs UK manufacturing and production by dropping tariffs to zero across a … range of products used in UK production”.
However, there should have been a footnote which said, “Not applicable in Northern Ireland”.
The company continued by saying that Northern Ireland, as part of the EU for goods, will be subject to EU custom duties and pay higher prices than its GB counterparts for the same goods, irrespective of how they arrive in Northern Ireland. That is all before the rules of origin are taken into consideration. Typically, a product requires 50% originating content based on its ex-works price to qualify for country of origin and allow it to be exported, even to Northern Ireland, under a free trade agreement using preferential rates of duty. If not, standard rates of duty apply. In future, GB exporters to Northern Ireland must hold evidence that the exported goods meet the relevant rules, which will involve HMRC audit procedures, production records, invoicing and accounting details and supplier declarations. The fact that a product is in free circulation in GB does not prove originating status.
They concluded by saying that today there appears to be little or no validation of origin and the current system is open to abuse. Why? This will not be the case in the future as customs issues are black or white and false declarations are fraudulent. Will some GB suppliers be bothered with the Northern Ireland market due to the compliance costs that they do not incur on the mainland? This will all push Northern Ireland manufacturers towards sourcing from EU suppliers. The protocol is unworkable and no amount of sticking plasters will ever fix it.
It is really disappointing that, despite Minister after Minister visiting Northern Ireland, they all get taken round to see the same businesspeople by the Northern Ireland Office. They do not get out there and talk to people who are really being affected. I support what the noble Lord, Lord Forsyth, and others have said: there is no real detail in the Bill. I hope that, by the time we get to Committee, there will be a lot more and that the negotiations that everyone in government seems to think are going to be so successful are actually seen to be successful. If not, then the Government have to do what they said they would: get out of the protocol, go for Article 16 to be invoked and tell the EU, “Sorry, we made a mistake and shouldn’t have signed it. We’re going back on it.”

Lord Lamont of Lerwick: My Lords, this Bill is highly unusual. It may be unique in the world because I do not think any other country has a national system of subsidy control. The United States does not; the EU does, but of course it is a collection of countries. I think this is the only national system of subsidy control. Of course, we had to have a national system because it was part of the negotiation with the EU on the TCA. The EU, understandably, had fears that Britain, having been subject to the EU system of subsidy control, was going to be free of all control. There therefore had to be a negotiated settlement, the seven principles of which are what is in the Bill.
I read the speech of the Secretary of State in the House of Commons very carefully and listened to the Minister’s speech today. It seems that the Government have, if they will forgive me saying so, something of a Janus-like stance on the Bill. On the one hand, it is a Brexit dividend: there are going to be hints of largesse and more spending, while the money will come more quickly and flexibly. On the other hand, this is also going to control subsidies. Well, which is it? There is an obvious conflict between the two.
It has been said several times, although I think Ministers in the Commons said it more than my noble friend did, that our system will be very much preferable to the slow, inflexible and obstructive system that they had in the EU. I am bound to say, as a Minister who dealt a lot with the EU—admittedly, a very long time ago—that that was not my experience of the EU system. It was a system, incidentally, largely designed by the UK and often operated by UK officials. Most of the applications for subsidies went through the EU through the block exemption. Most of them were approved, and relatively quickly.
There were, however, difficult negotiations over very large state aid projects, such as the motor industry in this country in the 1980s or the steel industry, but it was quite right that the EU took a long time to consider those. Let me put it this way: the EU acted as a discipline upon us, and we have to view a system of subsidy control as not just something permissive but something that imposes a discipline on Governments. That is the point of it but, of course, it poses questions as to how effective this will be compared with the EU system.
I put it to the House that the key difference between what is proposed now and the previous system is that, under the EU, no subsidy was legal until it was approved. Under this system, it is legal until it is struck down after legal proceedings in front of the Competition Appeal Tribunal. What worries me about this system—I say this as someone who, like my noble friend Lord Forsyth, believes profoundly in the merits of competition and market forces—is that there is no enforcer of the regime. The subsidy advice unit is really weak. It has no power to block and, instead of an enforcer, we have to rely on citizens to police this system and take legal proceedings. There is a degree of self-assessment. The question is whether that is enough to discipline and control the Government.
My noble friend may think I am being rather unfair to the Government, but this Government have made some curious subsidy decisions in their life. I never thought I would quote John McDonnell, the former shadow Chancellor, but he said the other day that this Government were the biggest nationaliser since Harold Wilson. That may be a slight exaggeration, but we have had the curious investment in the bankrupt satellite company OneWeb—how would that be dealt with under the Bill?—the bailing out of Bulb and the nationalisation of part of the steel industry. Then we have the Chancellor’s future fund, which subsidises everything from manufacturers of cannabis to dating agencies. There are serious questions to be asked about the Bill and whether it really will be the self-discipline that the Government say it will.
There are also a number of detailed points. I agree with what was said about thresholds—why should they be higher than in the EU? I shall wait with interest to find out the difference between a “subsidy of interest” and a “subsidy of particular interest”. It is a disgrace that these points are not made clear.
Subsidies distort, misallocate resources and often slow down inevitable and necessary change. However, provided that the Government stick to their principles of a competitive, market forces driven economy, I shall give the Bill at least two cheers.

Baroness Bryan of Partick: My Lords, contrary to what the Minister said in his introduction, the Subsidy Control Bill is yet another step towards centralising power at Westminster. Even after 20 years of devolution, the UK Government do not seem to understand—or, perhaps more accurately, do not support—the purpose of devolution.
The summary of the Bill provided by the Minister states that the UK is no longer bound by bureaucratic and burdensome EU state aid rules. The Bill introduces  equally bureaucratic and burdensome rules, excludes the devolved Governments from having a role in UK-wide policies and prevents them from developing their own policies on subsidies in their own economies. The Minister said that this gives freedoms, but those freedoms are constrained by the UK Government’s policies rather than by the devolved Governments’ policies.
The UK Government claim that they have had discussions with the devolved Administrations, but we heard from the noble Baroness, Lady Humphreys, that both the Welsh and Scottish Governments state they have had no opportunity to engage on the details of the Bill. Last Thursday the Government published a paper, Review on Intergovernmental Relations. Can the Minister explain why the Bill and the United Kingdom Internal Market Act were imposed on the devolved Administrations in advance of the new arrangements outlined in that paper?
There are many examples of how the Bill disregards devolution, and I will touch on a few. Clause 10, which defines and explains streamlined subsidies, states that only Ministers of the Crown may make streamlined subsidy schemes. Given that the regime impacts on areas of devolved responsibility, Ministers from devolved Governments should be able to lay such schemes before their own Parliaments. Clause 31, dealing with cooling off and mandatory referrals, should allow Scottish and Welsh Ministers to overrule such standstill requirements if they affect areas of devolved responsibility or where the devolved Government’s policy commitments may be delayed.
Clause 79 states that
“the Secretary of State must consult such persons as the Secretary of State considers appropriate.”
Can the Minister explain why, in the guidance on  the practical application of the principles covered in Schedules 1, 2 and 3, the devolved Ministers are not given an explicit role in mandatory engagement? As the Bill is currently drafted, the Secretary of State is not even required to talk to the devolved Governments if he or she does not deem it appropriate, let alone take their positions into account.
Can the Minister explain why the UK Government have decided to include agriculture in this Bill? The WTO and the trade and co-operation agreement have separate subsidy regimes for agriculture. The devolved Governments should be entitled to use subsidies in the most appropriate way to meet their particular needs in relation to agriculture, which will inevitably differ across the nations.
Schedule 2 impacts on devolved areas of energy and the environment. Different nations have the right to develop different priorities, particularly in setting climate change goals. Subsidies may play an important role in achieving these goals.
The Scottish Government’s response to legislative consent argues that they are concerned that Schedule 3 impacts on devolved areas of economic development and, potentially, other areas of devolved competence. Can the Minister explain what the point of devolution is if the elected Parliaments are unable to develop their own priorities, policies and economies according to the platforms on which they were elected?
We started down the road of devolution while part of the EU. If that had not been the case, there would of necessity have been discussions about how the four nations shared power. If the UK is to stay together—that is a big if at times—it will have to involve a change in relationship that goes beyond the steps outlined in the review of intergovernmental relations. It requires finding a way of sharing sovereignty between the nations, but there is still little evidence that this Government understand that.

Lord German: My Lords, the starting point I have for this Bill is that we need a subsidy regime for the United Kingdom and we need a rulebook. However, this Bill, as has already been said, falls far short of what is needed. It is, in fact, a rulebook with a lot of blank pages.
I want to focus on Wales. The construct of the new subsidy regime is incredibly important to Wales. As the prime beneficiaries of EU funding, a substantial amount of EU money was made available for the Welsh Government to utilise. To be clear, the power to use these funds came with a great deal of flexibility. An operational programme had to be approved by the Commission but these programmes spanned a six-year period and allowed for a wide range of policy options. For example, the agricultural subsidy regime in Wales was significantly different from that of England and still is. Importantly, all the EU money received was not countable as state aid. They were not considered to be a distorting subsidy.
I have two specific questions for the Minister. How does this Bill provide the same or a better level of flexibility to the Welsh Government on the use of subsidies than that which they previously had? Secondly, since this Government promised—here in this House, at least twice—that they were going to match the EU money Wales had previously received pound for pound, can the Minister tell the House the scoreboard? How much money has been made available to Wales already? Please separate out the agricultural subsidies, because that could cloud the overall picture. I am pretty sure that the Government have fallen short of their promise to this House substantially.
The second major issue relating to this Bill and its impact on the devolved Administrations is the very wide powers it places in the hands of the Business Secretary, mostly by regulation. As an aside, as the Minister said, the Bill gives the Secretary of State the power to change primary legislation by regulation as well. So, for example, the power to define a subsidy and subsidy schemes “of interest” and “of particular interest” is for the Secretary of State by regulation. These types of subsidies will be treated differently from other subsidies and we do not have any detail of what they are. Without them and without an industrial strategy, how can we and other public bodies be expected to understand what these are? There are more blank pages in the rulebook. I must say that I find it very strange that in a piece of primary legislation we get a clause—Clause 79—headed “Guidance”. This House has taken a very grim view of the use of guidance and trying to treat it as a legal power.
We had a debate just last week in this House in which noble Lords, almost universally around the Chamber, looked at how secondary legislation and guidance was being used. The Minister will be well aware that that will cause some problems during the course of this Bill. Given the economic development powers of devolved Governments, surely these details should be worked on together as they are developed, because they will impact significantly on the Welsh Government’s ability to exercise their legal powers for economic development. This House will surely want an opportunity to scrutinise them properly—another matter that this House explained and had great disdain for in the debate last week. Owing to the nature of the powers given to the Secretary of State, it seems that the framework could be an ever-changing one, depending on the views or objectives of the Secretary of State at any one time.
Last week, the Government announced a new council of United Kingdom and devolved Governments, which will be chaired by the Prime Minister—so I presume that trumps the Secretary of State for Business. So it is now the policy of this Government, according to the Written Statement made to this House just last week, that this new council
“provides … new processes to increase impartiality and to avoid, resolve and, where necessary, escalate disputes.”
So where does this dispute resolution procedure fit into the context of this Bill?
The Welsh Government and the Welsh Parliament have declined to give consent for this Bill to legislate in devolved areas, so does it constrain the new council in resolving disputes about the operation of the subsidy regime or not? Given the failure to achieve the legislative consent agreement from the Welsh Government and Welsh Parliament, how does this Bill respect the devolved competency of the Welsh Government? I am afraid that we are looking forward to a rule book with all these blank pages. I hope that they will be filled in, but I suspect that that is a forlorn hope.

Baroness Bennett of Manor Castle: My Lords, I heard state aid described this morning as something that people do not get very interested in, yet the range of speakers in this debate, starting at such a ridiculously late hour, puts paid to the claim that there is a lack of interest. Indeed, there could hardly be anything more crucial than what the Government support or do not support—and that, indeed, is a decision not to support. As the noble Lords, Lord Purvis of Tweed and Lord Whitty, pointed out, Governments have often tried to suggest that it was the EU’s fault that the UK Government were not providing support, but that claim does not stand up. That lack of support has given us industries, sectors and communities that are struggling to get a decent quality of life for their members, while living within the boundaries of this one fragile planet. It is something we are far away from today, be it the level of child or pensioner poverty, or the way our society collectively consumes the resources of our share of three planets, when we have only one.
My noble friend Lady Jones of Moulsecoomb will later in this debate be looking at the issues of environment and the lack of a strategic direction here, as in so much  of the Her Majesty’s Government. It is hard to have a strategic direction when the ship of state is being tossed around by a party whose members are running to and fro on leadership manoeuvres. My speech is going to focus on the democratic and structural concerns about this Bill, of which many have already been clearly set out, and I shall seek to add to that rather than repeat.
One issue that has not yet been raised is the Bank of England’s monetary policy activities, which are explicitly exempted from the subsidy regime in Clause 46. The Explanatory Notes do not give any explanation or justification for this. This is significant, because we are talking about billions of pounds frequently supplied in cheap credit. It could be used in a positive way, for environmental or social objectives, and the Bill could give direction to that effect. But of course, there is also the problem, which I have often raised in other contexts, of what is known as “too much finance”. One reason why we are in that situation today—the threat to our security that the over-large financial sector presents—is the massive government subsidies of the past, including guarantees for banks that remain “too large to fail”.
I want to pick up the point made by a number of noble Lords, notably the noble Baroness, Lady Humphreys, about the reduction in the publication threshold and the removal of legal controls. Rather than a central pre-approval of subsidies, the system will now rely on challenges from rival businesses to stop harmful subsidies. But with very high levels of subsidies, rather than the £500 that is so often the public sector norm, how can anyone challenge a subsidy that they do not know exists? There is effectively no control at all. Given the issues with government contracts—issues that have been so well-aired that I hardly need go into detail—here we have another potential huge concern about lack of transparency.
We have already talked a lot about the devolved Administrations, and I will not go over the same ground. But I will note that one of the reasons why Scotland is particularly concerned about agricultural subsidies is that it has made far more progress on land reform and has retained far more small land holdings—a very different agricultural structure from what we see in much of England. These crofts and small land holdings are a hugely valued part of Scottish agriculture, community and society and surely require special arrangements and support.
Finally, many noble Lords have covered the issue of how, oddly, the Government’s levelling-up agenda seems to be missing from the Bill. There is actually a levelling down from the EU regional aid system, which permits higher aid ceilings in less developed areas.
As we have heard from every part of your Lordships’ House, we are in a total muddle. This Bill does not hold together, and it is asking a lot of your Lordships’ House to try to pull it together. All I know is that we will try.

Viscount Chandos: My Lords, I thank the Minister for his introduction to the Second Reading of this Bill. As he was the long-suffering Minister for Exiting the EU who helped to deliver the trade and  co-operation agreement, it is particularly appropriate that he is now responsible for piloting through your Lordships’ House this Bill to introduce a replacement for the EU state aid rules, thereby meeting our obligations both under the TCA and towards the WTO.
It seems longer than thirteen months since the negotiations with the EU apparently hung in the balance over the question of the subsidy and the state aid regime that the UK would adopt after the final departure from the EU. Maybe that is because the Government’s shameless renouncing of a key part of the TCA, with respect to the Northern Ireland protocol, makes all the theatrics and rhetoric around reaching an agreement as insincere as the Prime Minister’s apologies. But there we were in December 2020, being asked by the party opposite—which had for decades, if not centuries, espoused the smallest possible role for the state and starved the economy of support and investment—to believe that it wanted to provide industry with financial support beyond anything that was possible under the EU state aid regime.
Whether or not there will be more rejoicing in heaven over one sinner who repents, we on these Benches welcome the acknowledgement—if the Government are sincere—of the important role the state has to play in the market economy. Can the Minister confirm that he supports an active role for government in industry and business? Does he believe that that is also the case for his ministerial colleagues, such as the authors of Britannia Unchained, who now apparently drive government policy in the vacuum left by this lame duck of an accidental Keynesian Prime Minister?
I believe that, the stronger that you believe in the principle of the state as an active player in the market, in a complex and nuanced way, the more important it is to have a clear and effective regulatory framework, within which the state has to operate. The track record of this Government in so many areas—public procurement of PPE inescapably springs to mind—makes it all the more important that absolute transparency and rigour of process is embedded in the legislation.
How well does the Bill measure up against these criteria? As my noble friend Lord Whitty and the noble Lord, Lord Forsyth, have already emphasised, it is hard to provide a definitive answer to that question in the absence of so much information. But, in the short time remaining, I will focus on a few points and questions that I hope the Minister can respond to.
Widespread concern has been expressed about the combination of the inadequacies in the database, and I am not sure that the word “editing”, used by the Minister, filled me with confidence. Neither does the short 28-day period available for interested parties to challenge, so long as they become aware of it.
As the noble Lord, Lord Lamont, has said, no enforcer is envisaged. It is of course supremely ironic that judicial review is being promoted as a key part of the enforcement. Can the Minister explain why the Government’s campaign against its use has been suspended in this case? How does he envisage it  actually working?
Finally—perhaps this would have been more appropriate as the first question—how easily can public bodies, large and small, be confident of knowing when they are effectively granting a subsidy? Clause 2(2) lists a sample of subsidies:
“a direct transfer of funds … a contingent transfer of funds … the provision of goods or services”
and so on. But it makes no reference to investments of any sort. The noble Lord, Lord Lamont, has already raised the question of how the investment in OneWeb would fit into the new regime. Investments are undoubtedly the most complex instance of effective subsidy—how can you determine whether an investment is on commercial terms? I hope that the noble Lord can explain what the Government’s plans are for incorporating investments into this regime.

Baroness Sheehan: My Lords, the Bill raises a number of serious questions, for example, around lower transparency—as articulated in the Delegated Powers Committee’s report—around the strategy that will guide these subsidies, around what a “subsidy scheme” or a “streamlined subsidy scheme” is and around what is meant by “subsidy of interest” and “subsidy of particular interest”. Why are these terms not defined on the face of the Bill? As a significant example of the UK’s post-Brexit landscape, these details in the Bill are essential, so I support all noble Lords who have voiced their concerns on these issues.
It is not enough to have a line in the Explanatory Notes saying,
“The Government aims to deliver ... UK ... priorities such as levelling up and achieving net zero”,
especially because we are now without an industrial strategy, which for inexplicable reasons was done away with early last year. The report of the Commons BEIS Committee last June on the scrapping of the industrial strategy was scathing, calling the axing of the ISC, the Industrial Strategy Council, “a retrograde step”, removing valuable independent scrutiny, insight and expertise.
Business is crying out for long-term consistency and clarity, but instead it is presented with the nebulous “plan for growth”, which does nothing to address how policy statements will be shaped to meet the country’s objectives and provides no expert oversight on what Ministers have actually been able to deliver. This Bill could have put some meat on the bones of the Government’s stated policy aims and given a sense of which sectors will be prioritised to achieve those aims, but they have failed to grasp this opportunity.
I am going to focus on the Government’s aim of achieving net zero. The fact is that, despite the stated strategic approach, there are no climate provisions in the Bill that set out a narrative on how this will be achieved. The Government could have incorporated a robust and systemic approach to climate change mitigation and adaptation, as well as to their “30 by 30” pledge, the aim of which is to protect and conserve 30% of the world’s land and marine ecosystems by 2030 which, by the way, is conspicuously missing from their stated aims. They opted not to do this. Therefore, will the Minister address how the regime would facilitate the future-proofing of industries and promote growth and employment in new, green sectors to ensure a resilient and competitive economy?
It is vital that the overarching subsidies regime is aligned with the country’s climate and wider environmental goals and addresses market and systemic failures. However, this Bill gives us no clue as to how they will do that. Perhaps the Minister can enlighten us. How, for example, will they incentivise investment to help to scale up innovative, low-carbon technologies, industries and solutions across the economy, which will require measures that go beyond R&D investment?
My final point relates to the COP 26 Glasgow climate pact, which included an agreement to accelerate efforts towards the phase-out of inefficient fossil-fuel subsidies. The Government currently subsidise the production and use of fossil fuels in a number of ways, including through tax breaks for high-carbon activities. As an example, in 2019, for each barrel of oil, the UK received $1.72 in tax. In Norway, that sum was $21.35. The Government really need to get a grip on what is happening with regard to advantages that are conferred on the oil and gas industry. Do the Government intend to take a more robust approach to ending subsidies for fossil fuels?

Lord Thomas of Cwmgiedd: My Lords, we plainly need a proper subsidy control regime and we need independent enforcement. We decided that this was a matter that was a reserved power, but the fact that it is a reserved power does not mean that every effort should not be made to agree the principles on which the independent enforcement agency is to work and to ensure that the procedure before it is fair and balanced. There are very good grounds, therefore, for the fact that the devolved Administrations have refused to give legislative consent.
I will look at two specific areas. The first relates to the way in which the detailed guidance under the Bill and other powers given to the Secretary of State will be operated. Guidance in relation to principles is of fundamental importance, given the very general and non-specific terms in which the principles are set out in Schedule 1. I understand what is meant by,
“Subsidies should pursue a specific policy objective in order to—(a) remedy an identified market failure”
That is reasonably easy to understand—but I am entirely uncertain about what is meant by
“address an equity rationale (such as social difficulties or distributional concerns)”.
What does that actually mean?
It seems that when one takes those words and focuses them on two areas that will be of acute political concern—regional aid and agriculture—we are building up a terrible problem for the enforcer unless we have clear guidance. The real deficiency in the way we are going forward, apart from the points that have been made by the noble Lords, Lord Forsyth and Lord Lamont, as to the way in which the Bill is constructed, is that there is a danger if we do not put this right on a basis of consensus between the UK Government—for a reason I will come to in a minute—and the devolved Administrations.
We have heard an awful lot about consultation, but I am afraid that I have lost faith in consultation. We need a proper protocol or—to use the word for which  we fought during the passage of the internal market Act—a framework within which this can all be agreed. I am grateful to the Minister for taking forward some of these suggestions during the passage of that Act, and I hope fondly that I can persuade him again to look more carefully at a mechanism, because it is critical. We have overlooked it, or insufficient attention has been paid to the fact, that the sole enforcer will be the Competition Appeal Tribunal. It will be a judicial body and it needs the clearest, most definite guidance to deal with what will inevitably be highly political issues. Speaking as a former judge, the last thing a body of that kind wants is to get involved in politics—therefore we need clear principles.
The second aspect is procedural fairness. In this respect, it is interesting to read that the Secretary of State, as a Secretary of State, is an interested party in any application before the Competition Appeal Tribunal, but the other governments are not. Therefore, the Secretary of State, putting on his hat as a Minister for England, can intervene before the Competition Appeal Tribunal to say, “We don’t want this—we are very unhappy about a factory going to Scotland or Wales”, but it does not apply the other way round. Where is the justice in that?
All these points show that we need a proper framework for consultation to iron out these points and ensure that the judicial body that decides these things does so on the basis of clear principles. That is what we should try to achieve.
I have 30 seconds to make a completely different point, of which the Minister has been given notice. It is on the powers given to the Treasury under Clause 47, particularly the power to make secret laws or directions. I never thought I would rise in this House to object to legislation on secret powers. There can be no justification —I hope the Minister will look at that again.

Lord Bruce of Bennachie: My Lords, I am happy to follow the noble and learned Lord, Lord Thomas, and indeed some of his arguments. This Bill shares the same characteristics as the internal market Act. It lacks detail and clarity but shows disregard and a lack of sensitivity to the devolution settlements. This House managed to secure amendments during the passage of that Act, and I hope that we will succeed in securing amendments to this Bill.
The Bill replaces the EU state aid rules, which developed in a way that had the advantage of practicality and clarity. However, it is not clear whether the lack of clarity is because the Government have no coherent strategy for any subsidy regime or they have one but are keeping it under wraps until they have the powers under the Bill. We need to know. Either way, the devolved Administrations of Scotland and Wales have reacted with understandable concern and, so far, have indicated unwillingness to give legislative consent.
The Law Society of Scotland stated in its helpful submission:
“We … stress the importance of ensuring that this bill and its accompanying guidance implements a regime that is clear, proportionate and gives businesses and local authorities (and their advisers), the tools to operate confidently within it.”
As it stands, the Bill does not do that. The imbalance between the role and powers of the Secretary of State and those of the devolved Administrations aggravates the situation. The Government argue that these are reserved powers. However, devolution requires consultation—genuine consultation—co-operation and respect, not the cavalier application of reserved powers.
Both Wales and Scotland have also expressed opposition to the inclusion of agriculture in the Bill. Indeed, the question arises as to why it is being included, given that we had extensive debate on the Agriculture Act, and that other national and international controls and commitments exist. NFU Scotland has stated that it is
“unequivocal that agricultural and rural development financial support”—
that is, subsidy—
“must be kept separate from the subsidy control regime being proposed.”
Some 86% of Scotland’s land is recognised as having “less favoured area” status. The management of that land has required consistent subsidy and support. Although the nature of the support has changed over the years, moving away from reducing livestock subsidies towards environmental and area payments, there is no doubt that these rural areas will require continued support.
Rewilding has its place, but tension is already emerging between this approach and support for traditional farming, land management conservation, tourism and small-scale economic development as a means of averting depopulation, which is re-emerging in rural Scotland having been reversed for many years.
The lack of clarity in the Bill means that there is an inherent contradiction. On the one hand, compared with EU state aid rules, public authorities may be able to provide subsidies that would have been prevented under those rules. However, they do not know whether they can and whether they will be challenged. This means that agencies could well refer the proposals to the EMA—although whether the EMA will be effective in reviewing them is doubtful—meaning more bureaucracy and delay, or they may simply decide, “It is all too difficult, let’s not do it”, and the schemes will be abandoned. The imbalance in the rules makes this even worse. Making the EMA the arbiter raises questions about the fact that the regime is excessively centralised, whether the EMA has the capacity or the expertise, and how it can be fair and effective to apply its role without the specific involvement of the devolved Administrations, which is not proposed at all.
This leads directly to the role of the Secretary of State. He or she has the power to define subsidies or subsidy scheme of interest or particular interest. The Minister really must give an indication of what the heck the Government mean by “interest or particular interest”. Can he give us examples or any idea of what is in the Government’s mind? The Secretary of State also has the power to refer to the CMA and, further, to challenge the ruling before the Competition Appeal Tribunal on the basis of government regulations that we do not even know about yet.
This presumably means that, if the Welsh or Scottish Governments proposed a subsidy scheme for their disadvantaged areas or sectors that the Secretary of State did not like or challenged, the scheme could be blocked. However, if the Secretary of State—acting as an English, not a UK, Minister—supported a subsidy regime in England that the devolved Administrations deemed unfair, there would be no such right. It may reflect reserved powers, but it fails to recognise the reality of devolution, which requires respect and consent. In reality, the Scottish Government’s interventions have been disastrously mismanaged, delivering neither jobs, production nor economic benefit. However, the way to deal with that is to throw them out, not challenge their right to do so.
I will certainly seek to support amendments to address the balance of the Bill and press the Government for clarity and transparency on how, in practice, they think this will operate.

Lord Dodds of Duncairn: My Lords, I hope that your Lordships will forgive me if I return to the issue of the Northern Ireland protocol and the impact—or lack of it, in many ways—of the provisions of this Bill on Northern Ireland. This is a result of the application of Article 10 of the protocol, whereby EU state aid rules will continue to apply to subsidies related to trade and goods and the wholesale electricity market in so far as these can effect trade between Northern Ireland and the EU. Clause 48(3) makes it clear that the new domestic regime will not apply in circumstances covered by the protocol. So, as was mentioned earlier, Northern Ireland will operate in a dual state aid regime.
The contrasting interpretations of Article 10 by the UK Government and the EU mean that the Bill presents significant legal and practical challenges. I know that the Department for the Economy in Northern Ireland has faced a lot of difficulties in trying to tease out what this will actually mean for businesses affected in Northern Ireland. I really hope that there will be better co-operation between officials here and those of the devolved Administration on these very important matters. The European Commission has set out the broad scope of which measures it believes can affect trade between Northern Ireland and the EU. In interim guidance, the Government have referred to limited circumstances that might apply under Article 10.
The Command Paper of July last year argued that the commitments in the trade and co-operation agreement, together with the Bill, make Article 10 of the protocol “redundant” in its current form. Therefore, it should be taken out of the protocol. I would be grateful if the Minister could tell us how those negotiations are going in this respect. The Government talked about reaching some interim agreements and other matters being dealt with in due course. Is this issue of state aid and subsidy control one of those areas where an interim agreement is being sought? We do not have a lot of time, if the aims in the Government’s Command Paper are to be achieved. I would welcome an update on that particular aspect of the negotiations.
So although I welcome, in many ways, the Bill’s principles and the aim of establishing an independent state aid regime that reflects the specific interests of  the United Kingdom, we obviously have a concern that Article 10 of the protocol will be a serious issue for businesses in Northern Ireland. I will give a number of examples. Clause 53 provides that a report on a proposed subsidy must be published within 30 days, yet the process for determining a referral in the EU can extend to up to a year. This could see Northern Ireland businesses put in a detrimental position and it could have an effect on where people decide to locate their investment. The EU caps maximum support at 50%, but no such provision is made in the Bill, so businesses in other UK regions could benefit under the UK regime and Northern Ireland would lag behind. The Bill allows for support for existing businesses to expand, but that is not the case under the EU regime. These will have a detrimental effect on Northern Ireland.
One thinks of the situation where there is competition for investment and Northern Ireland is operating under the EU state aid rules. Officials and Invest Northern Ireland, which is the agency in Northern Ireland that seeks foreign direct investment, have already highlighted that Northern Ireland could be at a serious disadvantage in terms of competition between the various regions and countries of the UK because we are operating under a completely different set of rules. It is clear that this will cause confusion and uncertainty for UK public authorities and businesses. The lines will be drawn. I urge the Minister and the Government to get on and give us some hope that the position set out in the Command Paper last July will actually be brought about, and that Northern Ireland will have Article 10 of the protocol removed from it.

Lord Leigh of Hurley: My Lords, I welcome the Bill. Clearly, we need to implement a much better new system for subsidies post the EU, and the Bill sets out a policy for the 500 or so public bodies which seek to give grants and subsidies in the UK. I believe that these amount to over £13 billion a year, so a huge sum of money. I draw your Lordships’ attention to my registered interests, in particular that I am the chairman in the House of Lords of the Campaign for Economic Growth, which I thank for its help with my remarks, as I do the ICAEW and Jonathan Branton at the DWF law firm.
A number of us have concerns about subsidies for businesses, particularly those that, frankly, do not deserve them, but we appreciate that the flexibility offered is important. My main concern is to understand where the focus on value for money is. Proportionate and necessary funding does not necessarily mean value for money. Can my noble friend the Minister assure us that value for money will be a key driver for subsidies? How will this be determined and assessed? The CMA is required to report on the effectiveness of the Act, but not the value for money of the subsidies, so who will do that?
There is a lot of nervousness that the principles are so open to interpretation that in the end it is the courts that will be kept very busy. So much of the detail will be in secondary legislation, which we really need to see as soon as possible. I suspect that many will want to go for CMA clearance well in advance, so can my noble friend confirm that the CMA will be resourced to handle this?
On a stand-alone basis, the seven principles proposed seem reasonable and proportionate, and I am sure that if they were applied by my noble friend the Minister and his colleagues at BEIS, all would be well, but this is going to be used by all sorts of bodies which, frankly, could probably drive a coach and horses through these words if they had a mind so to do. We have seen some perverse decisions by some public bodies. I appreciate it is very difficult, but are Her Majesty’s Government considering further controls and restraints in situations where attempts are made to circumvent the intentions of these principles?
I will focus the rest of my remarks on how the restrictions in the Bill might affect start-ups and recovery companies. Clauses 19 and 20 refer to an “ailing or insolvent enterprise”. I congratulate BEIS on using the word “enterprise” rather than “company”, as in previous legislation. I am concerned, however, that, as currently worded, these clauses might restrict grants or subsidies to those businesses which might really need them; that is, those in trouble. Is my noble friend the Minister able to amplify what the Government are seeking to avoid in their determination not to help ailing businesses?
I do not think it is clear what an ailing or insolvent enterprise is. The helpful Explanatory Notes state:
“An ailing or insolvent enterprise is one that would almost certainly go out of business in the short to medium term without subsidy.”
But in Clause 24 ailing companies are defined by three conditions. In addition to the one I have just mentioned, these are an inability to pay debts as due—fair enough—and where assets are below not just liabilities but “contingent and prospective liabilities”. I need not remind my noble friend the Minister that under the new accounting rules, so much more needs to be disclosed as a liability than was ever the case before. I believe that these definitions are cut and pasted from the Insolvency Act and I just do not think they are appropriate.
Working out what is a prospective liability and making the computations required is not easy. What is meant by the “medium term”? Who is to say how many businesses will be able to look to the medium term with any certainty? Perhaps we need our old friend the monitor back, as we have seen in other legislation.
Clearly, we do not want a terminally ill business to be propped up artificially as someone’s pet project, but we also do not want to rule out businesses such as start-ups, which might otherwise fall foul of these definitions. I am particularly worried about new businesses that are stretched and have certain challenges. Although I think that the exemption for the owners of SMEs from putting money into their businesses is sensible, I can see that all the accounting requirements might be too much for a small business which needs help urgently.
I look forward to some helpful clarifications during the passage of the Bill and to debating these clauses with my noble friend the Minister, who, I am sure, will be working with Back-Benchers in his usual collaborative way.

Viscount Trenchard: My Lords, it is a great pleasure to follow my noble friend—

Noble Lords: This side!

Baroness Randerson: My Lords, the Bill spells trouble—trouble between the nations of the UK, and because it sets out a series of criteria for subsidies and limitations on their use which are so vague, complex and mutually contradictory that it is bound to lead to repeated legal challenge.
The Bill is the son of the internal market Act, utilising subsidy powers granted to the UK Government within that Act. The use of those powers will constantly chip away at long-standing devolved powers over economic development, agriculture, housing, and so on. Wales Office Ministers and now Welsh Government Ministers have held major economic development and financial assistance powers since the Welsh Development Agency Act 1975. The Bill dismantles those powers.
I want to concentrate on the inclusion of agricultural subsidies within the general criteria set out in the Bill. It is usual to separate out agriculture, as the World Trade Organization and the EU does, in separate schemes, because the reasons for agricultural subsidy have long been very different. They are about the maintenance and supply of food and very different from the reasons for subsidising, for example, a new engineering plant. Nowadays, we overlay those reasons with complex environmental criteria.
Agricultural subsidies do not fit comfortably within a general framework, and they will be even more difficult to accommodate because the type of agriculture suited in Scotland and Wales to that countryside is very different from that practised, for example, on the plains of East Anglia. The Welsh Government could, for instance, devise a subsidy scheme to encourage the continued farming of marginal agricultural land where only sheep farming is viable. The Secretary of State, however, has such broad call-in powers that they could be used in this case on the grounds that it was an unfair competitive advantage to Welsh sheep farmers over English sheep farmers.
In due course, we will challenge these criteria, as we will challenge the concentration of power in the hands of the Secretary of State, who once again will act as Minister for England at one moment and a UK umpire at the next—an impossible balance to strike. That problem is exemplified by the additional scrutiny powers concentrated in the Secretary of State’s hands, whereby he can call in schemes devised by the Welsh Government, but Welsh Ministers have no powers to apply similar scrutiny and control over schemes devised by the Secretary of State for England.
Finally, we seek clarity as to where the common frameworks devised by Defra, which create an even-handed approach across the nations, fit into this. It seems to me that those common frameworks are incompatible with the Bill, and that the Bill will need to be amended to accommodate the principles that underlie them. As the Bill stands, there is no clarity of purpose, no levelling-up mechanism and no industrial strategy to underpin it. In the Brexit debate, Wales was  promised that we would not lose money. That was, of course, untrue. Two-thirds of Wales was an assisted area, and that funding has gone. Without that funding, the Welsh Government need other powers and mechanisms to attract investment, and subsidy schemes must be an important part of that.
This Bill is an embarrassing back-of-the-envelope Bill, and every nation of the UK deserves much better.

Viscount Trenchard: My Lords, I apologise to the noble Baroness for my over-eagerness to speak in this debate, and thank my noble friend the Minister for introducing this Bill. I declare my interests as stated in the register.
This Bill fulfils an obligation placed on the Government by the TCA, and is intended to clarify what our independent state aid rules will be going forward. The UK is currently bound by its obligations as a member of the WTO, and those contained in the TCA and other trade agreements. In general, I welcome the Bill, which is intended to provide a less cumbersome version of what we have been subject to as an EU member—although, as my noble friend Lord Forsyth has already pointed out, we are still ignorant of a lot of the detail and guidance. Maybe, when we finally receive that, the Bill may not be quite so uncumbersome as we have expected.
Under EU law, all subsidies had to be approved by the European Commission. As your Lordships are aware, as an EU member state the UK has, rightly, been more sparing in its use of state aid compared with most other member states, spending around 0.4% of GDP on state aid—about half the proportion spent by France and less than one-third of the German figure.
In devising the new regime, the Government have tried to find the right balance between the need to eliminate scope for political interference and anti-competitive market distortion, and the conflicting need to provide a process that is nimble, easy to negotiate and fair. As long as applications follow the core principles, public authorities will be empowered to take decisions which will assist economic recovery and national strategies, such as levelling up and net zero. Damaging subsidies which achieve little beyond keeping failing companies alive for longer than the market would otherwise permit are prohibited.
Members of another place were right to reject the proposed amendment to principle G, which would have required public authorities to give too much weight to possible negative effects of subsidies on the UK’s net-zero commitments. This could have caused them to look less favourably on subsidies designed to achieve entirely unrelated objectives, such as high street regeneration or the provision of training opportunities for young people.
The seven subsidy control principles are in fact broadly similar to those under which the EU system operates, and six of them are derived from the TCA. Principle F is a sensible new addition, which seeks to minimise any negative effect on competition and on foreign and domestic investment in the UK’s internal market. It is crucial that the Bill gives effect to the  internal markets Act, which stipulates that the regulation of state subsidies is a reserved matter that must be consistently applied across the whole United Kingdom. The excellent Library briefing covers this question in some detail.
Several noble Lords have expressed the view that the Bill is unfair to the devolved Administrations. However, I am struck by the comment of Mr James Webber, a state aid lawyer, that the Bill in any event gives the devolved Administrations much greater freedom to make spending decisions and craft economic interventions than they would have had if the UK had remained an EU member state. Can the Minister confirm that the Government’s policy is that those powers which were held centrally by the EU should now be held centrally by the UK Government, to avoid an incoherent and inconsistent approach between the four nations of the UK? Can he also explain whether a similar approach will be taken both to subsidies contained in devolved primary legislation and to those given by public authorities? The Bill introduces, in Clause 76, the concept of a “promoter” whose views may or may not correspond to the views of a legislature as a whole.
Lastly, can the Minister tell the House whether the Government take seriously the concerns about transparency expressed by my honourable friend John Penrose and others? Surely, he has a point in suggesting that, without adequate transparency, a lack of compliance with the subsidy principles might not be spotted until it is too late, or not at all, and companies could be driven out of business. At £500,000, surely the threshold for entering subsidies into the database is much too high. Would not a figure of £100,000 be more appropriate? I look forward to hearing the Minister’s views on this and other matters.

Baroness Jones of Moulsecoomb: My Lords, I too would like some clarity on the Bill. For example, there are some key exemptions in it that cut out important issues, and some key omissions that mean that the new subsidy scheme misses a huge opportunity to support levelling up, net zero or innovation of any kind. I have five questions for the Minister. I am sure that he will not be able to deal with them this evening, but I would be happy to have them answered in a letter.
The Bill contains principles that energy and environment subsidies must adhere to. Some of these principles are very welcome—for example, subsidies must not relieve polluters from their liabilities and caps can be put on maximum CO2 emissions eligible for electricity generation subsidies. That is all good, but I do not understand—this is my first question—why these principles are carved out as applying only to energy and environment subsidies. Why are environmental principles not being applied to all subsidy schemes so that we can ensure that all public money is being used to move towards net zero and tackle the climate and ecological crises? Every subsidy should increase the level of environmental protection as compared to a baseline situation. At the very least, no subsidy should be granted that will reduce the level of environmental protection as compared to the baseline.
Secondly, the confusion is further compounded by the absence of any definitions of what constitutes an energy or environment subsidy. It is not at all clear when these special principles do or do not apply. For example, is a scheme for discounted bicycles an environment subsidy, subject to those extra principles, or not? Does it depend whether the scheme is intended to get people to drive less, or drive the same amount but cycle just for fun? I can see quite a lot of future legal battles over this Bill when we try to apply it.
Thirdly, we know with certainty, because the Bill tells us in Clause 51, that nuclear energy is not included in the energy and environment subsidy scheme. I would really like to know the Government’s justification for this. Is it because they believe that nuclear energy will fall foul of the principles, such as fair and competitive processes or increasing the level of environmental protection? Nuclear energy subsidies are a huge amount of money—many billions of pounds—so it is very important to understand why they are being excluded from the provisions that apply to all other energy sources, especially renewables. Is it giving preferential treatment to nuclear? It rather looks like it. I will probably table an amendment on this in Committee.
Fourthly, another notable carve-out in the Bill which my noble friend Lady Bennett has raised is that none of the subsidy rules will apply to the Bank of England’s monetary policy transactions. I would like to understand why. Greens have long understood that monetary policy should be a major tool in tackling the environmental and climate emergencies, such as directing the Bank’s cheap credit towards environmentally sound lenders or at the very least cutting out the most environmentally damaging ones.
Fifthly, I would like to find out more about the community energy schemes, which I thought were happening a long time ago. They have environmental and social benefits, and there is a low risk of distortive effects on competition. Can the noble Lord tell me what is happening with them? I am likely to table amendments on all these issues.
I hate agreeing with the noble Lord, Lord Forsyth, but he is absolutely right; when the Government bring us a thin Bill such as this, we will put in a lot of amendments, just to try to understand what is going on. Of course, we then get the blame for slowing down the business. Can the Minister be very clear that we need enough time to debate this properly and not take it late at night, as is the Government’s usual practice when they want us to hurry up and stop talking?
This Bill is really lacking that overarching sense of using monetary and fiscal policy to transform our economy from a dirty, polluting one to a clean, green, high well-being society. The mechanisms in this Bill will not achieve that and lack ambition. I am looking forward to working with noble Lords—even the noble Lord, Lord Forsyth—in proposing major changes to this Bill so that we can get back on track to reach net zero.

Lord Fox: My Lords, it is always a pleasure to follow the noble Baroness, Lady Jones. This has been a really interesting debate and has not unfolded in the  way I had originally anticipated. In trying to sum up this debate, there is a short sum and a long sum and I am afraid I am going to give both.
The short sum is that, if the Government table Bills like this, they are going to need more Committee days than they have so far allocated. We do not yet know what this Bill is, and we need to find ways of teasing that out from the Government because clearly they are not volunteering the information at the moment.
On the longer sum, it is always good to try to work out what the Government are seeking to cause or trying to cause to happen. I think we have to look to Schedule 1 for that. Principle A in Schedule 1 says:
“Subsidies should pursue a specific policy objective in order to … remedy an identified market failure”—
correct the market, or—
“address an equity rationale (such as social difficulties or distributional concerns).”
Principle C says:
“Subsidies should be designed to bring about a change of economic behaviour of the beneficiary.”
All of this sounds very social democratic and very interventionalist. That might explain some of the concerns voiced by the noble Lord, Lord Forsyth, about subsidies. However, it is still not clear what sway that schedule will have over the actual behaviours and subsidy behaviours we see. The noble Lord, Lord Lamont, and, I think, the noble and learned Lord, Lord Thomas, made the point about how this is policed and whether Schedule 1 is the rule by which this regime is to be judged. This is still very unclear—in fact, not clear at all.
In the various letters and presentations supporting the Bill, the Minister carefully painted the picture of a nation handcuffed by the European Union. However, as we have heard from the noble Baroness, Lady Blake, and others, the UK has traditionally handed out less in public funding subsidies than most of the other EU countries. To date, the UK has chosen not to subsidise economic activity to the level that it could have done within the EU. Of course, it was the perfect right of the Government at the time to make those decisions.
Looking forward, my noble friend Lord Purvis asked how much money there will be. In the past we have funded less than we could. There is a good deal of discrepancy about how much money will be available on a straight like-for-like basis without starting to include funds such as agriculture. Some profit and loss—P&L—for this would be quite handy.
However much money there is, the next point lacking clarity is how the Government will prioritise what is going on. As my noble friend Lady Sheehan, the noble Lord, Lord Ravensdale, and others said, our guide to this is vanishingly vague. The industrial strategy was scrapped, Build Back Better is essentially a colour brochure, specific plans to reach net zero remain essentially unpublished and the “levelling up” slogan is wandering the corridors of Whitehall looking for a purpose. None of this acts as a useful guide.
Where, unusually, the noble Viscount, Lord Trenchard, is wrong is that rather than this avoiding political interference, it creates a vacuum where political interference can run wild. There are suspicious people who would  say that the actual guide for allocating taxpayers’ money will have to answer only one key question: how does the proposed subsidy benefit the electoral ambitions of the Conservative Party?
I am sure the Minister would not want that sort of thing running around these corridors. To avoid it, he could start by circulating the drafts of the guidance. He could start by sending out the draft of the support to the Bill, the policy statements and the routes that this Bill will go by. This echoes the point made by the noble Lord, Lord Forsyth.
As we heard from the noble Lord, Lord Lamont, the EU has a long-standing and rigorous programme that aims to benefit the poorest communities. Rules exist under the EU regional aid scheme that cause higher aid to go to the least developed areas. This was largely through the European Regional Development Fund or the European Social Fund.
We have heard about Wales, but Cornwall received the highest ERDF/ESF allocation of any English area. Over the last 14 years, that totalled €1.24 billion. Looking forwards, can the Minister confirm whether Cornwall will continue to receive this level of support? The evidence suggests it will not. In fact, subsidy law experts Jonathan Branton and Alexander Rose note that the Bill does not propose a preferential system that would lead to targeted support for disadvantaged regions. They argue that the consequence of this could be better-off areas receiving support that would previously have gone to less well-off areas.
It is clear, looking at the role of the CMA, that much clarity is required. We need to know how enforcement is going to emerge. Also, the impact assessment says that there will be just 19 new posts within the CMA. Does the Minister honestly think this represents sufficient resource to police this whole scheme?
The issue of OneWeb was raised by the noble Lord, Lord Lamont, and the noble Viscount, Lord Chandos, and I have a different question around that. In order for that investment to happen, there had to be a letter of direction from the Minister to the Permanent Secretary, which says quite a lot. In future, how would a letter of direction be treated by this regime, given that the Secretary of State is likely to have to refer himself in order to have this reviewed? It is a special case, and I would like to know the answer.
The subject of reporting thresholds has been well documented today and I will not repeat it, except to say that reporting at £500,000 is absolutely the wrong route to take. In the Commons, John Penrose MP and Kevin Hollinrake MP both proposed amendments, and we will be working with others across the House to propose similar amendments here.
The effect on devolution has also been well rehearsed, not least by my noble friends Lady Humphreys, Lady Randerson and Lord Bruce, and the noble Lord, Lord German, the noble Baroness, Lady Bryan, and others. I associate myself with them. At the heart of the problem seems to be a take-it-or-leave-it approach to the relationship from London. The Minister has set out a roll-call of meetings with the devolved authorities and their offices, but it is clear these meetings were not dialogues but show and tell meetings. Ministers portray this Bill as a permissive move that empowers local  authorities and the devolved authorities, but for their part, the Scottish and Welsh Governments see it as a now regular incursion of tanks on to their devolved lawns by Westminster. We agree with that latter view, and there will have to be amendments, going forward, to address that.
On Northern Ireland, my noble friend Lord Purvis and others detailed how conflation of the TCA and the Northern Ireland protocol will cause problems. The noble Lord, Lord Dodds, also brought this up. The Minister of State in the Commons sought to address this to some extent and to dispel the issue of double jeopardy, but it is clear that he failed to do that. We need to see, in detail, what legal position and legal advice the Government have had on double jeopardy, and we need to debate that in full when we get to Committee.
It seems that the Minister is seeking to play down the issue your Lordships have had with the Bill, and certainly will have when he sums up. There are issues from start to finish with it. Further, it is designed as a shell Bill—another shell Bill. It provides the Government with the opportunity to fill that shell with secondary legislation that can, at worst, amend primary legislation. This, again, is unacceptable. Overall, a lot of work needs to be done on this Bill before it leaves your Lordships’ House, and the Grand Committee awaits.

Lord McNicol of West Kilbride: My Lords, I thank all noble Baronesses and Lords who have participated in this Second Reading. Across the House there is a wealth of knowledge that can only bode well for the Bill itself—if not for the Minister. As the noble Lord, Lord Fox, has said, time will be required in Grand Committee and at other stages to make sure that we can move forward with it. It is a pleasure to be back on Labour’s Front Bench, especially for such an important Bill.
I will start with some general remarks and then focus on some specific issues of concern and, I hope, offer some helpful solutions, as have many other noble Lords and Baronesses. I believe that we can use the best endeavours of your Lordships’ House to improve the Bill. In previous dealings that I have had with the Minister and his department, they have listened to reason and good arguments, and I am sure that that will continue.
My first question, which is about the Delegated Powers and Regulatory Reform Committee of your Lordships’ House, has been partly answered by the Minister. If other noble Lords have not read the committee’s report on the Bill, it is well worth reading. It is scathing, and the Minister rightly said that he and his department will be looking at its recommendations. I want to push him further on that. Will we see some changes and address some of the issues raised in the DPRRC report in Committee, or will that happen later? The sooner, the better.
As we have heard, most of the concerns about the Bill are not ideological or political. Likewise, Labour’s concerns about it are rooted not in ideological dogma but in a sense of right and wrong, fairness and transparency. What we have before us is, in principle, a  positive step. The right subsidies can have a transformative impact on communities across the country. Moving away from the EU regime for pre-approval is a clear win, but only if we are transparent and open about all the subsidies.
However, as my noble friend Lady Blake of Leeds has outlined, it feels like this new flexibility comes at a staggering and, frankly, unacceptable price: a lack of policy certainty, transparency and safeguards and, most worryingly, as we have heard from many today, a lack of proper parliamentary scrutiny. Some of the debates we will have on the Bill, including on the treatment of the devolved Administrations, could and should have been avoided altogether; had the Government learned from their mistakes during the Brexit process and, more recently, the passage of the United Kingdom Internal Market Act, we could have resolved them. The Minister himself is a veteran of both, so he should not be surprised when he sees the forthcoming amendments as we move to Committee and Report.
The four main areas, which I will touch on only briefly because they have been covered well across your Lordships’ House, are reporting transparency, the devolved Administrations, statutory oversight and investigations, and subsidies and their use. It appears from earlier discussions in the other place that Her Majesty’s Government will argue that the Bill as written delivers by reducing red tape, reducing administration and protecting competition. Many—including respected colleagues on the Minister’s own side such as the noble Lords, Lord Lamont, Lord Forsyth and Lord Leigh, and many Conservative Members in the other place—believe that that fundamentally misses the point of the Bill. Amending it in respect of reporting thresholds, the quality of the database, the timely manner of reporting and tighter controls on subsidy schemes could and would make the use of subsidies more transparent, reducing the possibility of corruption and shining a light on any cronyism or misuse or abuse of subsidies. As Her Majesty’s Government’s own analysis shows, such amendments, especially on the database, could cost as little as £20,000—a small price to pay to see what is being subsidised across the UK.
With relatively little transparency and another issue about the large number of various exemptions in terms of what has to be publicly recorded, it is not clear that authorities across the country and the public will have the confidence that public money is being spent according to the Bill’s seven key principles. Of course, local, regional and devolved authorities should be free to establish subsidies in support of their chosen economic objectives, but so too should neighbouring authorities and competing businesses have confidence in the process: that the reporting and regulations are up to speed.
Much like the UK Internal Market Act, the new subsidy regime will have far-reaching consequences across the UK, not just in the short term but for many years to come. We believe that the Bill can be strengthened and enhanced by a number of amendments. Ensuring that the Secretary of State gains the consent of the devolved Administrations when making secondary legislation and issuing guidance on the Bill would be a great start. Secondly, the Bill should be amended to  ensure that the devolved Administrations are represented on the CMA subsidy advice unit; thirdly, it should give the devolved Administrations the power to call in subsidies, as we have already heard; fourthly, it should ensure that the devolved Administrations are explicitly included under the definition of “interested party”; and, finally, it should give the devolved Administrations the power to make their own streamlined subsidy schemes in order to support their own national priorities. When responding, could the Minister let your Lordships’ House know whether his department has given any consideration to a new UK-wide body—an economic prosperity council—where the devolved Administrations and the English regions could be represented?
Turning to statutory oversight and investigations, subsidy decisions are never going to be purely about competition. That is clear from the seven principles that public authorities have to consider. But does the Minister have confidence that the CMA has the necessary expertise to regulate subsidies, especially as this is a new area outside its existing remit? Currently, the CMA can investigate only subsidies that are referred by the Secretary of State or subsidies of “interest”—if they are volunteered to the CMA by the granting authority—or subsidies of “particular interest”. This means that damaging subsidies could go under the radar and not be investigated. This would be a particular risk where public authorities get their assessments wrong, conclude that they are not providing a subsidy or do not even upload them on to the transparency database. Could the Minister also outline any plans to open up the oversight process, or does he believe that the Bill as it is written suffices?
Many noble Lords have touched on the levelling-up agenda. Due to time, I will not go into detail on that, but the comments made by the noble Lord, Lord Ravensdale, about the Bill being silent on disadvantaged regions and having nothing on assisted areas should be remedied when we go through Committee and Report.
One of the other areas I would like to question the Minister on is the freeports policy. How does the Government’s current freeport policy feed into or work within the Bill as it is currently written, and how is it represented?
The Minister mentioned net zero three times in his opening remarks, but, reading through the principles, I did not see the issues relating specifically to net zero. We believe that the Bill could and should be used to promote a cleaner and healthier country.
We will debate the Bill in Committee very soon, but I hope that the half-term recess will afford the Minister and his officials a much-needed opportunity to think again on many of the issues that have been raised this evening and in earlier debates in the other place, so that we can get right and truly seize the opportunities before us.

Lord Callanan: I thank all noble Lords for their engagement ahead of today’s debate and their contributions this evening on this important Bill. It has been a good debate, despite the relatively late hour. I apologise to our two Green ladies, but I am not  responsible for the timings, which were primarily driven by the time that the House dealt with previous business. However, we have had some informed and thoughtful speeches from all sides, which have given me much food for thought. I am particularly fascinated by this emerging unholy alliance between my noble friend Lord Forsyth and the noble Baroness, Lady Jones, who are at opposite ends of the political spectrum. I look forward to seeing how long this lasts when confronted with the reality of politics. It will be fascinating to see, and will no doubt give great amusement in Committee.
A number of noble Lords raised concerns regarding the role of the devolved Administrations. I thank the noble Baronesses, Lady Blake of Leeds and Lady Bryan, the noble and learned Lord, Lord Thomas of Cwmgiedd, and the noble Lords, Lord Whitty, and Lord Bruce of Bennachie, for their considered contributions. I emphasise that the devolved Administrations are and will remain responsible for the spending decisions on devolved subsidies within any subsidy control system. We have produced a Bill that not only protects but strengthens our union, through the creation of a single, coherent framework that empowers public bodies across all four nations to design subsidies that are tailored to local needs. It is in all our interests to ensure that the regime works for the whole United Kingdom and enables the UK’s domestic markets to function properly and efficiently, which is precisely what this Bill does.
It is important that I draw attention again to the point that Ministers and officials have engaged in and continue to engage extensively with the devolved Administrations on the new regime. Such discussions have also been paramount in informing the policy development from the outset. This is not to say that we have agreed to everything. Clearly, we have not—there are some areas of disagreement. However, our proposal aligns with their views on the majority of issues, including the regime’s objectives, their foundational principles and the need to respect the devolution settlement and to enable support for levelling up. Therefore, we hope that the devolved Administrations can understand and support our approach and that ultimately, they will give their legislative consent.
A number of noble Lords raised the issue of the Secretary of State’s powers within this Bill, but they are limited and appropriate. The regulation of subsidies is a matter reserved to the UK Parliament, and the Secretary of State therefore has responsibility to ensure that the new regime is enforced consistently across the whole of our United Kingdom. The Secretary of State must also ensure that the UK is compliant with our international obligations.
A number of noble Lords across the House have also raised concerns about transparency. I reassure my noble friend Lord Forsyth and the noble Viscount, Lord Chandos, that my department is working on a programme of improvements to the subsidy database. These will be completed soon and will address a number of the specific concerns raised here and in the other place. The Government will continue to reflect carefully on the points raised today and will engage further on our findings with parliamentarians in both Houses as the Bill progresses.
With regard to secondary legislation and the regime’s guidance, I thank the noble Baroness, Lady Blake, the noble and learned Lord, Lord Thomas, and other noble Lords for their contributions. To directly address the point made by my noble friend Lord Forsyth and the noble Lord, Lord Bruce, around this Bill being a framework, I draw attention to the testimony provided by the parliamentary counsel for domestic legislation in the House of Commons, Daniel Greenberg. He emphasised the need for the Bill to take the form that it does in order to give the flexibility for the ongoing relationships between the different powers concerned by the substance of the Bill.
As I mentioned earlier in response to the intervention by my noble friend Lord Forsyth—I am sorry if I gave him the impression that he was not permitted to intervene; he was entirely right to do so if he wished—and also addressing the point made by the noble Lord, Lord Fox, we will shortly publish a package of illustrative products that will set out much more information on the regime. We have been keen to ensure that relevant stakeholders have had the appropriate opportunity to provide input in the development of these regulations and guidance. They will be published early next week in time to support the Grand Committee debate of the Bill and will include draft regulations on subsidies of particular interest and guidance on the application of the principles. The final guidance will be made available in advance of the new regime’s commencement to ensure that public authorities understand it and can prepare for it.
On the specific request raised by the noble Lord, Lord Purvis of Tweed, on future impact assessments, I can assure him that we will produce further such assessments where appropriate, and we will provide more information on that in due course.
A number of noble Lords raised questions around net zero. I reassure the House—in particular, the noble Lord, Lord Ravensdale, and the noble Baronesses, Lady Bennett and Lady Sheehan—that the Bill supports our net-zero goal. The principles provided under the Bill are common sense and clearly support the UK’s priorities on net zero and on protecting the environment. An explicit principle on net zero, in our view, is therefore not necessary.
A number of noble Lords also commented on levelling up and disadvantaged areas. I reassure the House that this Bill supports the Government’s levelling-up agenda. It gives public authorities the flexibility to grant subsidies where they are best served to support economic growth in local places, but without the excessive bureaucracy or pre-approval processes. This directly addresses the proposal of an assisted area map such as those under the EU state aid regime, a point made by the noble Lords, Lord Ravensdale, Lord Fox and Lord McNicol. These maps were a necessary feature of the EU state aid regime, in which subsidies were prohibited unless specifically permitted. Assisted area maps were therefore required to facilitate an exemption for subsidies addressing regional inequality.
The UK’s domestic regime is fundamentally different, and it is aligned with the rest of the world. It is a permissive regime that allows public authorities to assess for themselves whether their subsidy or scheme  can be given by reference to the sets of principles that I outlined earlier and of prohibitions and requirements. I can therefore reassure the noble Lord, Lord German, and the noble Baroness, Lady Bennett, that the absence of a dedicated regional aid exemption does not mean that public authorities are any less able to give aid or to address regional inequality. As long as a subsidy is justifiable on policy grounds, such as addressing regional inequality, and the public authority considers that it is compliant with the basic set of principles and prohibitions, then it can indeed be given.
I move on to the vital subject of Northern Ireland and points raised by my noble friend Lord Forsyth, the noble Lords, Lord Purvis and Lord Dodds, and the noble Baroness, Lady Hoey. In relation to the Bill’s interaction with Northern Ireland, I reiterate that the UK will of course continue to be a responsible trade partner that respects its international obligations, and our commitments made under the Northern Ireland protocol are no exception. There will be no double regulation of subsidies. Subsidies that are subject to the protocol, which complies with EU state aid rules, will be exempt from the requirements of this new domestic regime. Under current arrangements, subsidies within the scope of the Northern Ireland protocol of the withdrawal agreement in respect of goods and wholesale electricity markets, which affect NI-EU trade, will still need to comply with EU state aid rules. Subsidies for services will ordinarily comply with the more flexible UK domestic subsidy regime.
The noble Lord, Lord Purvis, also referred to technical guidance, noting that in specific circumstances it may be useful for companies to keep separate accounts. This is one possible way to demonstrate that a subsidy given in Great Britain is not being used to cross-subsidise a subsidiary in Northern Ireland, but it is not a legal requirement and nor is it relevant to all companies.
I can reassure the noble Lord, Lord Dodds, that, subject to negotiation with the EU, the intention is that all types of subsidy would be within scope of the domestic regime. The Government will create streamlined routes for public authorities across the UK to award subsidies that help achieve UK-wide priorities. We will continue to work closely with the DAs while developing this policy both at official and ministerial level, and we are committed to continue our close engagement on this with the devolved authorities.

Lord Fox: Sorry to intervene, but to be clear so that I understand: what the Minister has just said is, I think, that if I have a business which has an operation in County Antrim and an operation in Hereford, and they are both technically eligible for a subsidy for the goods they make, the operation in Hereford would be eligible for a subsidy under the UK scheme but the operation in County Antrim would not be. Is that correct?

Lord Callanan: It would depend on a number of factors, and whether the subsidy complies with the set of basic principles that we outlined earlier under the UK regime. But under the current system—and obviously negotiations are ongoing—and if it was for a good, then the operation in Norther Ireland would be subject to the EU state aid regime because Northern  Ireland is subject to that under the current terms of the protocol. If my interpretation is not correct, I will write to the noble Lord.
I assure the noble Baroness, Lady Randerson, that devolved Administrations, as primary public authorities, can also set up schemes for use by other public authorities where that is within their existing functions and powers. For example, the Welsh Government are perfectly within their rights to set up a scheme, if they wish, that can be used and accessed by all local authorities in Wales.
I move on to the role of the CMA and the subsidy advice unit. I agree wholeheartedly with my noble friend Lord Lamont, who noted the importance of independent oversight and robust scrutiny of our new regime. The subsidy advice unit will have an important advisory role for a relatively small number of cases, and an overall monitoring role for the system as a whole. Most subsidies granted are low risk, so it is right that the unit’s focus should be on the small number of subsidies with a greater likelihood of causing distortion in the market. The subsidy advice unit will provide advice that is genuinely useful to public authorities in designing their subsidies and assessing against their regimes’ requirements. This strikes the right balance between improved freedom for public authorities while providing confidence to interested parties, investors and the general public.
My noble friend also raised the issue of the Competition Appeal Tribunal. I can assure him that the regime will be robustly enforced through this UK judicial system, with the Competition Appeal Tribunal hearing judicial reviews of the award of a subsidy or the making of a subsidy scheme. The Competition Appeal Tribunal is UK-wide, has extensive expertise in the related area of competition law and is well suited to hearing challenges to the award of subsidies. In our view, the roles afforded to the Competition Appeal Tribunal and to the new subsidy advice unit will foster a regime that is robust, while empowering public authorities to deliver subsidies more quickly, more easily and more flexibly if that is what they choose to do.
A number of noble Lords, including the noble Lords, Lord German and Lord Bruce, and the noble Baroness, Lady Bryan, raised the issue of the inclusion of agriculture. In our view, the inclusion of agriculture and fisheries subsidies will help to protect competition and investment in these sectors in the UK. This position was supported by the majority of the respondents to the UK Government’s consultation who answered the question on agriculture and fisheries. Although agriculture and fisheries subsidies are not in scope of the subsidy control provisions in the UK-EU TCA, they are still subject to other international rules. The proposed approach will provide consistency for granting authorities while retaining sufficient flexibility for the devolved Administrations and all public authorities to deliver support where it is needed and how they see fit, given their responsibilities.

Lord Bruce of Bennachie: The Minister said that this was supported by the majority across the UK, but he has not acknowledged that it was not supported by the agricultural representatives in Scotland or Wales.

Lord Callanan: I do not have a regional breakdown of the responses to the consultation, but this is a UK-wide system and regime. If there is a regional breakdown, I will certainly provide it to the noble Lord.
I will move on to answering the point made by the noble Lord, Lord McNicol, and the noble and learned Lord, Lord Thomas, about the DPRRC report. I am grateful to the committee for the production of the report; I read it with interest. Of course, I recognise the strength of feeling in this House; it has come across today and been conveyed to me by a number of noble Lords, especially with regard to Clause 47. There is a lot to consider there in terms of striking the right balance on this and the other issues raised in the report, but I can commit to reading it very carefully and considering what policy steps we may take in response.
The noble and learned Lord, Lord Thomas, also referred to the Treasury’s powers. Measures implemented by central banks in pursuit of monetary policy have always been considered outside the scope of EU state aid regimes and rules—just as well given the massive amount of subsidies that it has imposed in recent years. In the joint declaration on monetary policies and subsidy control, the EU and the UK confirmed their mutual understanding that activities conducted by a central bank in pursuit of monetary policy are outside the scope of the subsidy control requirements in the trade and co-operation agreement. One of the Bank of England’s independent statutory functions is to maintain UK price stability and, subject to that, support the Government’s economic policy. It is both appropriate and necessary that the domestic subsidy control regime exempts monetary policy subsidies and schemes in pursuit of these objectives.
I assure my noble friends Lord Lamont and Lord Trenchard, and the noble Viscount, Lord Chandos, that this Government do not intend to return to the policies of the past, such as the failed 1970s approach of attempting to run the economy by bailing out fundamentally unsustainable companies. I suspect that this will probably not be the subject of a new agreement between the noble Lord, Lord Forsyth, and the noble Baroness, Lady Jones, but, nevertheless, that is our policy.
The principles in this Bill make it clear that subsidies need to address either identified market failure or an equity rationale as a legitimate objective in order to be awarded. It is important to note that not every example of government spending is a subsidy, of course. The Bill sets out a detailed definition: if a public authority purchases goods or services on market terms, that is public procurement and not a subsidy. Parliamentary oversight of spending and managing public money, as well as the Green Book requirements, will continue to apply and are important protections against bad government spending decisions.

Lord Purvis of Tweed: The Minister is being generous in giving way this evening. For the record, will the Minister say—it was hard to discern from the comments on the processes—what the geographical area of a market is? The Bill refers to market failure, and the Minister has referred to it. He also referred to  many public bodies that will be local authorities. When I emailed the subsidy control email inquiry, asking, as a resident of the Scottish Borders, whether Northumberland is a market, in order to discern whether it will be a market failure, I was told that there is no Northumberland market. So, what are the geographical areas of a market? The Government are not going to have the geographical indices for deprivation, whereas previously, we knew what the markets were in respect of state aid support.

Lord Callanan: I will reflect on that, speak to officials and write to the noble Lord about the appropriate definition, is that is okay with him.
I will respond to the question from my noble friend Lord Trenchard, the noble Lord, Lord Fox, and others about transparency thresholds. Regarding thresholds at which subsidies are uploaded to the database, I listened carefully to the debate in the other place and the comments from noble Lords this evening. In our view, the current transparency provisions seek to strike  a balance between reducing the administrative burdens and costs to public authorities and ensuring that the necessary information on subsidies is available. In our view, this is vital to ensure that interested parties are able to challenge potentially harmful subsidies. However, I accept that there is a legitimate debate about the level at which those thresholds are placed.
Let me conclude by reaffirming what I said in my opening remarks. In our view this Bill creates a robust yet agile system that allows public authorities to provide subsidies where they are needed most. At the same time, it will allow us to maintain a competitive free-market economy as we build back better from the pandemic, and to chart a new course as an independent trading nation. I look forward to discussing many of these points further in Committee, but in the meantime, I commend this Bill to the House.
Bill read a second time and committed to a Grand Committee.
House adjourned at 10.02 pm.